The organisation shall ensure that personnel’s wages and benefits composition are detailed clearly and regularly to them in writing for each pay period. The organisation shall lawfully render all wages and benefits due in a manner convenient to workers, but in no circumstances in delayed or restricted forms, such as vouchers, coupons or promissory notes.
Under SA8000 8.3, the organisation is required to ensure that information about wages and benefits is clear, in writing, and given to workers for each pay period. This is intended to ensure that workers have a regular and reliable record of their wages and benefits. This permits them to review each pay period’s sums and make claims for any wages or benefits due but unpaid. Thus, the organisation should have a wage system in place that ensures wages are:
a. Understood by workers
b. Paid in a convenient manner
c. Paid in a timely and regular fashion
d. Accurately calculated
e. Paid in accordance with legislation, contract and collective agreement
f. Paid in full and without unauthorised deductions
g. Not tied to use in organisation-owned stores, etc.
h. Privileged ahead of payments to creditors in the event that an employer cannot meet its financial obligations (i.e. insolvency).
No Discrimination
The organisation should ensure fairness and non-discrimination in its remuneration principles and practices
(see Section 5: Discrimination).
Provided Services
Services provided by the organisation to its workers for a fee, such as dormitories, food plans, or medicine should be provided at cost price and not for a profit.
Living Wage Estimates and Benchmarks
Living wage estimates and benchmarking should be used as the basis for setting wage levels and/or supporting a collective bargaining process, where applicable. Benchmarks do not supplant collective bargaining rights, but serve as a replicable tool to support social dialogue between workers and employers.
LIVING WAGE ESTIMATES
Note: SAI has partnered with other standard-setting bodies17 through the Global Living Wage Coalition to endorse a rigorous and reliable methodology for producing living wage benchmarks for specific regions, called the Anker Methodology. These benchmarks will eventually be available for organisations and auditors to use for SA8000, so they do not have to create their own estimates. SAI will provide further information and training on the use of the Anker Benchmarks for SA8000. This training will also include information on the incorporation of in-kind benefits into living wage analyses. In-kind benefits are those provided to workers that cover or reduce certain costs of living, such as free or subsidized meals or transportation. The Anker Methodology benchmarks are in no way intended to supplant collective bargaining.
Until the benchmarks are available for a SA8000 certification applicant’s location, organisations and auditors should continue to use the existing SA8000 living wage estimate calculations, as described below. Each organisation is responsible for maintaining a living wage estimate for the location of its facility or facilities. SA8000 certification bodies and auditors also maintain living wage estimates for each organisation that they audit. SA8000 auditors are responsible for reviewing the organisation’s estimate and verifying its compliance with SA8000
remuneration requirements by comparing it to their own estimates and through interviews with the organisation’s
workers and stakeholders.
The organisation should calculate a living wage estimate using the following factors:
1. Assessment of workers' expenses
2. Assessment of the average family size in the area
3. Analysis of the typical number of wage earners per family (typically not more than 1.6)
4. Analysis of government statistics on poverty levels
5. Analysis of the cost of living above the poverty line
As noted in the definition of a living wage, a worker’s weekly wages without overtime should enable him or her to afford a decent standard of living for a family of average size in his or her specific location. Elements of a decent standard of living include food, water, housing, education, health care, transport, clothing, and other basic needs including provision for unexpected events and some discretionary spending.
While the quantitative estimation mentioned above offers organisations an initial point of reference to estimate the living wage, it may not be adequate in addressing various cultural and economic situations. For example, issues like health insurance are not always incorporated within basic needs, depending on the social system, although they should be. Therefore, qualitative verification is recommended as a means of verifying the appropriate application and analysis of the quantitative measures.
The organisation should frequently consult with workers and their representatives to understand whether wages are sufficient to meet basic needs for themselves and their families. Quantitative analysis, no matter how well defined, may only partially reflect these real needs. Workers are the most important source of information on the topic of basic needs. It should be noted, however, that workers may feel uncomfortable sharing their personal opinions about their basic needs with their employer. In order to conduct discussions more objectively, the organisation should construct a market basket with workers, using the quantitative analysis as a point of reference. Workers and trade union consultations are important for developing an adequate corrective action plan and timetable. Where appropriate, consultation with workers and their representatives should be documented.
Since wages are one of the chief indicators of working conditions, many other stakeholders in a particular region, such as trade unions, labour rights NGOs, government agencies, academics, and research institutions may have accumulated much knowledge and research data on the topic. Some may even have conducted independent research on the living wage. By maintaining regular communication with local groups it is possible to learn of locally relevant wage information and research. Where appropriate, consultation with local stakeholders on the living wage should be documented.
One calibration technique is to compare wages at the organisation to the industry mean of wages paid at
unionized organisations. However, this simple approach would not work in locations where independent unions do not exist. In such cases, both local trade unions and NGO representatives should be consulted. By building an ongoing dialogue, organisations and auditors are able to better assess the wage situation in a given region.
