JBC n.v., Complaint 373

CONCERNING LABOUR STANDARDS
Payment of a living wage Reasonable hours of work
STATUS
Closed
DATE
2018-04-16

On 16 April 2018, a factory worker reached out to FWF's complaints handler in China and claimed that he/she is paid 2000 RMB per month for working 8 hours a day and 6 days a week. This is below the local minim wage and overtime (OT) premiums.

As of 1 July 2017, the local minimum wage in Yangzhou City is 1890 RMB per month. If the complainant worked 8 hours a day and 6 days a week in March 2018 to make 2000 RMB he/she the hourly wage he/she received was 9.3 RMB per hour, which is below the local minimum wage of 10.86 RMB. The total months wage of the due hourly wage paid (minimum + overtime premiums) should be at least 2781 RMB. There is a gap of 781 RMB/month.
The complainant hopes FWF will help her increase payment as to meet the legal requirements.

Findings and conclusions

On 16 April 2018, a a factory worker reached out to FWF's complaints handler in China and claimed that he/she is paid 2000 RMB per month for working 8 hours a day and 6 days a week. This is below the local minim wage and overtime (OT) premiums. FWF declared this complaint admissible and informed JBC, the member brand sourcing at this factory. JBC reached out to the factory management, who claimed that the complaint was not true as the actory gives the workers a monthly allowance of 700 RMB a month at the end of the year, which would be 8400 RMB in total. However, this does not include the correct, legal overtime premiums. During the subsequent investigation process, the complainant felt pressured by the factory and requested FWF to stop investigating the complaint. FWF strongly recommends JBC to schedule a monitoring audit at this factory. Such an audit will identify whether overtime and wages are paid out correctly, and if not these issues will be taken up in the CAP. JBC is expected to cooperate with the factory on resolving all CAP issues, taking up the possible wage issues as priorities.

Overview of the complaint investigation

2018-04-20 Investigation

FWF informed JBC, the member brand sourcing at this factory, who in turn requested feedback from factory management. The factory argues that the claim is not true. They agree that two warehouse workers are paid 2000 per month in their payroll.
But the factory claims that additionally, the factory gives the workers a monthly allowance of 700 RMB a month at the end of the year, which would be 8400 RMB in total.

2018-04-30 Investigation

In their reaction, the factory management agreed with the complainant about the monthly salary of 2000 RMB. However, factory management adds that workers receive an annual bonus or wage compensation of 8400 RMB (700 X 12months).

On 25 April FWF heard back from the complainant. He/she disputes having received an annual sum of 8400 RMB. Instead he/she received 1500 RMB at the end of 2017. Even though the complainant uses the same term of ‘wage compensation’ as factory management, this should, in fact, be seen as an annual bonus.

The factory management's reaction did not include anything about overtime premiums. The overtime premiums for the worked Saturdays should be paid out monthly, and be 200% of the daily wage.
It seems factory management confuses an annual bonus (what they call wage compensation) with OT premiums which are to be paid out monthly.

According to Chinese Labour Law, overtime premiums should be at least 150% of the wage when extended working hours are assigned to employees; at least 200% of the wage when employees are assigned to work on rest days and no deferred rest can be taken; and at least 300% of the wage when employees are assigned to work on statutory holidays.

FWF proposes that the FWF China representative will call the factory on 2 May to check whether the factory is aware of overtime regulations and explain how OT premiums should be calculated.

2018-05-02 Closed

FWF received a message from the complainant that he/she strongly requested that investigation into the complaint should be stopped. He/she felt pressure from the factory, and was afraid that is was obvious to factory management that he/she is the complainant: only two workers in the warehouse receive a salary of 2000 RMB/month.

The complainant further stated that he/she really appreciated FWF's help and support. While FWF is now forced to close this complaint, the issue of OT premium payments in the factory can be taken up by the member in general. Therefore, FWF urges the member company to schedule a monitoring audit as soon as possible. An audit will identify whether or not OT premiums are paid correctly. If they are not, JBC can work together with the factory to correct these issues.