DW-Shop GmbH, Complaint 745

CONCERNING LABOUR STANDARDS
Payment of a living wage Reasonable hours of work Legally binding employment relationship
STATUS
Verification
DATE
2019-07-14

The complainant claimed that the factory always delayed their wage payments. The previous month's wages are only paid to the workers after the 5th of the next month. This means that sometimes there is a delay of 5 days but sometimes this is more as well, even as many as 14 days in May 2019. The complainant also stated that the workers worked excessive overtime hours; they only had two days of rest in a month and worked consecutively for more than seven days. In addition, they did not receive the correct overtime premiums.

Overview of the complaint investigation

2019-07-30 Investigation

Factory stated that:
1) As for the delayed payment of wages, they learned that there is such a situation recently, but factory management stated that payments are delayed for five days at most.
Some employees fail to complete the resignation procedures according to the factory policy, which also causes the delayed payment of wages. DW-shop promised to discuss this with factory management, and ensure that they pay the wages before the end of the month, according to national law.

2) As for excessive overtime, factory management stated that it does occasionally occur. Factory mentioned that they are working on it by improving efficiency, training and improving their consideration of workers skill levels.

3) As for the overtime payment, factory management stated they pay according national law. Factory management did not clearly explain the calculation of overtime premiums and how they are paid to the employees and will arrange a training to make sure everyone understands.

2019-08-05 Investigation

After contacting the complainant on the 5 August, he/she stated that:
1. The payment of salary was delayed again by 5 days. The salary of June 2019 has not been paid so far.
2. Excessive overtime hours have not been reduced. On Sunday, 4 August 2019, the workers were still on duty.

2019-08-05 Conclusion of the investigation

Factory confirmed there were indeed delayed payments and there is occasional overtime. In addition, the factory stated that they pay the overtime according to the national law, but did not explain clearly to the the workers how this relates to piece-rate salary. At the same time, the complainant stated that there late payment of salaries occurred again and that overtime persists. The complainant confirmed that the factory announced a training on overtime payment.

2019-08-05 Remediation

The complainant stated that:
1) The payment of worker salaries for the month of June was also delayed by 5 days. Fair Wear requested that the factory pay the workers' salaries for the month of June immediately, and that in the future the payment of the salaries will be completed before the last day of the next month. Fair Wear also asked DW-shop to request a proof of payment from the Factory (e.g. a wage slip or bank transfer).

2) Excessive overtime hours still persist. The workers were again required to work on Sunday 4 August. DW-shop has asked the factory to be transparent and send an overview of the attendance record.

Fair Wear also provided DW-shop with a 'wage comparison sheet' to help the factory to explain the piece rate compared to hourly wage and what the factory needs to pay for overtime hours. The overtime premiums in China are as follows: regular overtime premium is 150%, weekend overtime premium 200% and statutory holiday premium is 300 % of the minimum hourly rate. Fair Wear explained that the factory can improve overtime and payment of overtime gradually and offers to give further explanation to the factory if needed.

Fair Wear furthermore requested the factory and brand to provide photos of the training with training material and signatures of workers that attended.

2019-08-13 Verification

The complainant mentioned that their wages of June 2019 were paid to them on the 6 August 2019. The complainant had no further improvements to report on overtime and their payments, nor did the complainant join a training. Moreover the complainant stated that they were not provided with a payslip.

2019-08-16 Verification

As proof of payment, DW-shop received two bank payment statements labelled 'salary' that were printed by the factory on 7 August 2019. The factory mentioned that "We have explained the calculation method of overtime pay to the workers, but some workers still do not understand it. We will conduct a new training to solve this problem in the near future."

The brand mentioned that other details are pending and they asked for attendance register and proof for training several times.

Furthermore, the brand is still discussing overtime hours and the on time payment of wages despite their low leverage at the factory.

Fair Wear stated that the 2 bank statements are not conclusive.

2019-08-30 Verification

Factory informed the brand that wages of July were on 30 August. FWF reached out to the complainant who confirmed that the wage of July 2019 had been paid to a portion of the employees, who were working in the factory on 30 August 2019. However, there still remain a number of employees who have not been paid. The complainant was one of the employees who have not yet been paid.

Still pending is:
1) The attendance register and payslips of the last 3 months.
2) Proof of training on salary payment and overtime.

2019-09-06 Verification

Factory mentioned that there are 6 people who have not received their salaries of July. The reason is that they do not have bank cards and need to be paid in cash.

On 11 September the factory stated that there are still two employees who have not come to the finance department to receive their salary.

2019-09-25 Verification

1. The brand received the attendance register from June - August
Fair Wear confirmed that the attendance records looked okay, the possibility of revealing the actual situation on hours work is high.

2. The factory stated that the date for a planned training is 27 September 2019. The factory noted that "the team leader will attend the training and the team leader then trains the employees."
Fair Wear requested that the factory shares the training materials which they will use.

3. Fair Wear stated that the wage sheets of June and July 2019 that were provided by the factory are not clear. Since only the working days are mentioned, but no overtime hours are mentioned on the paysheet, the wage structure is not revealed. It can not be verified how the factory pays workers for their overtime hours.

4. The brand stated that wage register resp. pay slips are still pending - despite of daily inquiries made by the brand.

Fair Wear reached out to the complainant to confirm whether some workers preferred to be paid by cash and have to go to the finance department for wages every month.

2019-09-30 Verification

Fair Wear reached out to the complainant, who said that the wages of July 2019 were paid to him/her on 11 September 2019, meaning that there was a delay of 11 days.

And so far, she/he has not been paid the wage of Aug 2019 (today is the due date for the wages).

In addition the complainant made the below new complaints:
1. They were very busy in September 2019, so far, they have only received 1 day off for the entire month of September.
2. The workers just received the news from factory that they will only receive 1 day off for the coming national holiday (October 1 to 3).
3. The complainant does not expect to be paid for the statutory overtime hours.

Fair Wear asked the brand to communicate with the factory to give the workers at least 3 days off in the upcoming golden week in October, or make sure, if statutory overtime hours are arranged, that workers will be paid 300% of normal wages, according to the correct overtime premiums as set out by National Law.

2019-10-17 Verification

Factory responded that as far as they know, the employees in the sewing workshop only had one day off in September. This was due to the tight delivery schedule of some customers. Furthermore, the workshop only had one day off on National Day, but factory will pay full overtime.

The main reason for this is that the recent delivery time is too tight. The factory confirmed that they will arrange compensatory holiday when the time is free later. Because production is very busy, the training of employees on overtime wage calculations has not yet been arranged. The factory expects it to be arranged next week. The factory did send the training materials.

Fair Wear assessed the material for training on the legal benefits and overtime premiums, which did not explain the detailed wage structure, but the material itself is consistent with the relevant legal requirements. It would be good to know which customers give a tight delivery schedule and with the upcoming Chinese New Year in January. It is important that this does not become a structural problem where the workers have to continue to make a lot of overtime hours to fulfil the tight delivery schedules of some customers. FWF asked to note that compensation days given is not the same as ensuring one day off per week.

2019-10-29 Verification

Factory stated that their boss promised to pay the salary of September at the end of the month and that all the previous wages have been paid.
Factory promised to pay 300% of the salary to the employees on the National Day that they worked.

2019-11-07 Verification

FWF tried to reach the complainant without any luck.

Factory stated the salary for September had been paid on 31 October.

The staff training will be arranged on 8 November 8.

2019-11-11 Verification

Fair Wear received feedback from the complainant, and she/he said so far his/her wage of September 2019 had not been paid. They hoped to get the wages by end of each month. The complainant said as far as she/he know, there were around 30 or more employees who have not received their wage of September.

In addition, they did not receive any training on the 8 November 2019, neither were they informed of any training schedule.

2019-11-14 Verification

Factory stated that the September salaries were paid on time.

2019-12-03 Verification

1. Fair Wear's complaint handler reached out to the complainant with regard to their wage of October 2019. The complainant stated that the wage of September 2019 was paid to them on the 27 November 2019; and the wage of October 2019 was paid to them on the 2 December 2019 (with a delay of 2 days). So although not on time, this has improved. The brand is encouraged to ask the factory to keep improving and pay the November salary before the last day of December 2019.

2. Since the factory stated that they will pay 300% of the salary to the employees on the National Day and the complainant stated that they worked on 2 and 3 October 2019, which were statutory holidays. However, as confirmed by the complainant, they don't think they were paid 300% OT for these 2 days, as they do not receive more money than last month. Moreover, the complainant informed a couple of his/her colleagues even said they received a couple of hundreds yuan less than their wages of September 2019. Please ask the factory to provide proof of the payments of 300% on the statutory holidays that people worked, as they promised.

3. Workers have not received a payslip, so they do not know the wage structure and whether they are paid 300% OT or not. Please ask the factory to provide a payslip to their workers.

Moreover, the complainant informed the factory owners wife is trying to identifying the one who files the complaint FWF. Can you request the factory urgently to not try to identify the complainant. FWF sees a complaint as something good that now can be hopefully resolved. The workers are worried to being targeted to express their grievances.