Overtime Goals

Aug 21, 2012

Overtime Goals

A story in the Southern Metropolis Daily (a newspaper published in Delta Region of China) a few months ago puzzled me very much. It is reported that workers of the Japanese Saginomiya factory in Foshan initiated a stoppage at work in order to negotiate to work more than the regular hours (40 hours per week), as they could barely make a living with the minimum wage earned from regular working hours. In the end, the workers did not manage to get what they wanted as there simply is not enough work to be done, the factory's management explained.

Excessive overtime hours have always been a top issue for non-compliance in China. It intensifies the problems of falsifications of working-hour and payroll records, so as to hide excessive overtime hours from social auditors who represent the interests of international retailers. Factories that are found to have excessive overtime (more than 20 hours overtime per week, according to the ILO Convention) usually explain that workers need to work overtime as the whole point of being a migrant worker and away from home, is to make money. How true is it?

If you have been keeping an eye on the minimum wage growth rate in mainland China, you would have noticed that minimum wage usually increases as much as the change rate of the food price index. Say food price index (one of the components of the Consumer Price Index) goes up by 15%, minimum wage of any big cities usually raise as much as 15%. In China, calculation of minimum wage, in a nutshell, is the calculation of basic need wage, meaning, how much a household would need to earn to afford food, plus 10% as discretionary income. Business Social Compliance Initiative (BSCI), one of China’s social audit schemes, takes minimum wage directly as the basic need wage (BSCI scheme aims to meet basic need wage, not living wage that is targeted by SA8000).

Living wage is a wage that a household needs to earn in order to support the family for food, housing, education, medical, and so on. These are complex to calculate as each country has a different idea of what the minimum levels are.

With the cost of production rising, free dormitory rooms and meals are a thing of the past for manufacturing migrant workers. Workers usually need to pay for electricity, water and food. In the Foshan case mentioned above, no dormitory was provided to workers, and many other factories are doing the same. Migrant workers are struggling with higher and higher living costs relating to work. Under current regular working hours regulations, which barely support their living situations, workers would rather leave and go home.

So here comes the dilemma. For retailers that have CSR programs that focus on labor compliance, excessive overtime hours (meaning more than a total of 60 hours per week) is a big NO. However, workers can only earn a basic needs wage (wage sufficient for food consumption) if they only work the regular hours. The question of how to balance this challenging situation is one retailers need give some serious thought to.

CRessence was founded by Sammie Ho, a local Hong Kong person who has traveled around hundreds of factories, from the Far East to the Middle East for almost a decade, raising awareness of Corporate Social Responsibility and Ethical Consumption. Get to know more and give support by visiting http://cressence.org/ and https://www.facebook.com/CRessence


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