Wages and benefits paid for a standard working week shall meet or exceed legal or industry minimum standards and always be sufficient to meet basic needs of workers and their families. In addition, some discretionary income (i.e. for savings) must be provided. Overtime must be remunerated separately, with the statutory surcharges. Other legal wage components such as paid vacation and holidays or special wages for the Chinese New Year must be guaranteed.
An obligation in and of itself is not enough, of course. Therefore, all our producers are regularly monitored by independent FWF auditors who carefully examine the remuneration of employees. This is done by checking payroll records and working time records. Interviews with workers are conducted for confirmation. VAUDE receives a detailed list of payment figures with local and international benchmarks. This helps us to quickly recognize the wage levels of our producers and whether we need to take action.
Inspections carried out by the Fair Wear Foundation show that our producers have high wage levels that are far above the statutory minimum. Nevertheless, at all audits carried out in 2018, there were objections regarding "payment of a living wage", and deviations from the Asia Floor Wage were uncovered. This benchmark is being advanced because the minimum wage in many countries is not sufficient to provide a decent standard of living.
Our producers have high wage levels. You're surely wondering why there were deviations from the AFW. The AFW always refers to the country as a whole; regional differences are not taken into account. However, the regional differences in the cost of living are significant. For this reason we have decided not to use the AFW for our comparisons. Meaningful benchmarks for living wage are, unfortunately, still not available for all countries and regions, which is why we have joined various working groups for the establishment of a living wage to actively promote the issue.
We are already a step ahead in Vietnam where there has been a new benchmark for fair wages since 2017. This was increased by the Global Living Wage Coalition (GLWC) using the anchor method. Where the Anker Benchmark is available VAUDE commits to the Anker Benchmark. Read more here. This benchmark applies to Region 1 and Region 4. For regions 2 and 3, we have extrapolated the benchmark in proportion to the minimum wages. You can find wages of production sites that were audited in 2018, in relation to minimum wage and the anchor benchmark for fair wages here.
Wages in different countries of production can’t be compared if they're listed in the local currency because it is never clear how much things cost there. For this reason, we have converted wages and minimum wages into their purchasing power. We have used the World Bank's conversion factor.
Wage data is collected by the FWF in audits. We do not have figures on the starting wage per department. The FWF only collects the lowest, highest and most frequently paid wages in a department. The wages represented here are average pay for the most common job in the sewing department.
Because each producer is generally audited every 3 years, we also only have updated data on wages every 3 years. From 2019 onward, we will collect data on wages on an annual basis. The graph depicts wages collected during the FWF audits in 2018.
»Fair wages continue to be a challenge. VAUDE is working intensively on the issue and is committed to the new Living Wage Incubator Project of the FWF.«
VAUDE is part of the Living Wage Incubator project. The Fair Wear Foundation launched this project in 2016 for dedicated members. The goal is to provide a platform for the member companies to exchange ideas on the subject and to learn from each other. At the moment we are working on a pilot project with a producer in Vietnam. You will be able to read more about implementation and the current state of the project in the next report.