Complaints > China > Continental Clothing Company Ltd, Complaint 258

China - Continental Clothing Company Ltd, Complaint 258

Status
Resolved
Country
China
Date
02/24/2017
Complaint ID
258
Member involved
Continental Clothing Company Ltd
Filing party
Worker
Filed against
Factory management
Grounded
Yes

The case

The complainant claimed that the factory charges workers 380 RMB per month for their personal share of social security. Workers checked on the social security website whether this was correct and found out that the personal share they should pay was 287.8 RMB per month, a difference of 92.2 RMB per month. Upon informing management, the complainant was told that workers were free to wave their social security fees if they did not want to pay 380 RMB. The complainant wanted the factory to reimburse the extra money workers had paid and start charging the correct amount of 287.8 RMB. The complainant informed FWF complaints handler that deductions were made from all workers. Factory management took the necessary remediation steps Since October 2017, the correct amount of 306 RMB has been deducted from workers’ wages. The complainant informed FWF complaints handler that no back-pay had yet been received.

Findings and conclusions

On 24 February 2017, FWF's complaints handler in China received a complaint from a worker who claimed that the factory was charging workers 92.2 RMB extra per month for social security. The complainant was told that workers could waive the additional charge. The complainant requested that the factory reimbursed the additional charge to all workers and deducted the correct amount instead. FWF declared this complaint admissible and informed Continental Clothing, the FWF member company sourcing at this factory. Continental Clothing reached out to factory management who claimed that they reimbursed 3 RMB per day to all workers for social security. The complainant was not aware of this daily refund. According to the Chinese Labour Law and FWF Code of Labour Practices, no illegal deductions should be made from workers’ wages. Factory management took the necessary remediation steps and from October 2017 started deducting the correct amount of social security. However, the complainant informed FWF's complaints handler that no reimbursement had been received for the additional social security charges. In May 2018, factory management informed Continental Clothing that the illegal deductions from 2017 had been fully repaid to workers as a bonus for Chinese New Year. No illegal deductions were made since January 2018. FWF's complaints handler could no longer reach the complainant via phone. Therefore, FWF advised Continental Clothing to request proof of bank transfers to each worker as a confirmation that all illegal deductions had been repaid. The factory provided the relevant documentation and this complaint is now resolved.
See details

Overview of the complaint investigation

08/15/2017 Investigation

On 27 February 2017, FWF informed Continental Clothing about the case. In August, the brand informed FWF that factory management responded by referring to their practice of refunding 3 RMB/day to workers for social security. However, the corresponding documentation that was sent to the brand dealt with the annual bonus.
FWF also asked the complainant to provide a pay slip that showed workers were obliged by the factory to pay an amount of 380 RMB per month. The complainant provided a pay slip that proved that workers paid 380 RMB per month towards social security.
According to local legislation, the personal share of the pension is 8% of the wage, which is 230.2 RMB (8%*2878 RMB/month). The personal share of medical insurance is 2%, which is 57.6 RMB (2%*2878 RMB/month). In total, this is 287.8 RMB per month to be paid by workers. This is also the amount that workers had to pay in 2016.
Since May 2017, the personal share per month has been 306.8 RMB. Calculation: 3068*(8%+2%).
The complainant was not aware of the refund of 3 RMB/day. Furthermore, workers receive their annual bonus irrespective of whether they buy social security or not.

08/23/2017 Conclusion of the investigation

According to the Chinese Labour Law and the FWF CoLP, no illegal deductions should be made from workers’ wages.
The workers’ share for pension and medical insurance was 287.8 RMB per month and became 306.8 RMB per month in May 2017.
Before May 2017, the factory was deducting an extra 92.20 RMB per month per worker and an extra 73.2 RMB since May 2017.

10/30/2017 Evaluation of the complaint

Since October 2017, the correct amount of 306 RMB has been deducted from workers’ wages. The complainant informed FWF complaints handler that no back-pay had yet been received.

05/24/2018 Remediation

Continental Clothing was informed by factory management that the illegal 2017 deductions had been fully repaid to workers as a bonus for Chinese New Year. No illegal deductions have been made since January 2018.

05/30/2018 Verification

As the complainant stopped using his/her phone number, FWF could not check the truthfulness of the factory's statement. FWF advised the member brand to ask the factory for proof, such as bank transfers confirming that deductions had been repaid.

06/19/2018 Verification

The factory sent the relevant documentation to Continental Clothing. This proved that they had repaid all workers for the extra social security deductions between January and July 2017. However, FWF could not check whether these amounts were actually received by all workers. Therefore, FWF asked Continental Clothing to request proof of bank transfers to each worker.

06/25/2018 Resolved

The factory provided the bank transfers to each worker as requested by Continental Clothing. This complaint is resolved.

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