Fair Compensation: A Living Wage… and More

Unlike most apparel companies, HanesBrands owns many of its manufacturing facilities. These owned facilities employ over 50,000 associates and produce about two-thirds of our total unit volume.

HanesBrands provides our production associates a living wage which we define as compensation (wages, bonuses and in-kind benefits, excluding overtime) sufficient to enable associates/workers to at least meet basic needs and have some discretionary income. “Basic needs” is defined as the minimum necessary to have access to appropriate resources, including food, safe drinking water, clothing, shelter, energy, transportation, education, sanitation facilities and healthcare services.

We recognize that associate/workers’ compensation should be sufficient to afford a decent standard of living for the worker and her or his family. Living wage is a family concept and, as part of the overall analysis, encompasses the concept of multiple wage earners in a household.

HanesBrands has been a fully accredited member of the Fair Labor Association (FLA) for over 10 years. The FLA is a true multi-stakeholder initiative comprised of civil society, NGO’s, labor organizations, businesses and universities whose aim is to “promote and protect workers’ rights and to improve working conditions globally through adherence to international standards.” The FLA and its members (including HanesBrands) have long recognized that fair wages and other forms of compensation are an integral element of promoting fair and ethical production of consumer goods world-wide.

As part of our commitment to continue to advance the principle of a living wage, and through our active participation in the FLA, HanesBrands has publicly released a revised version of our Global Standards for Suppliers which includes an updated compensation provision that is fully aligned with the FLA code. We are committed to all elements of our Global Standards for Suppliers – including its compensation/living wage provision.

We are committed to all elements of our Global Standards for Suppliers – including its compensation/living wage provision.

In 2015, the FLA established a Fair Compensation Work Plan to support its members as they make progress toward ensuring workers receive fair compensation. Since then, the FLA has developed tools to support implementation of the work plan, including a Wage Data Collection Toolkit. More recently, the FLA developed a Fair Compensation Dashboard along with wage ladders, allowing members to perform interactive wage benchmarking of facilities.

The FLA uses a compensation data collection methodology derived from the Ankers’ methodology used by the Global Living Wage Coalition (GLWC) and chooses living wage benchmarks for its wage ladders that are internationally recognized and have transparent calculation methodologies. Where available, the FLA wage ladders include benchmarks from the GLWC.

HanesBrands has conducted living wage benchmark studies using the FLA tools and its wage ladders. These studies were conducted at 26 facilities in key sourcing regions including Bangladesh, China, Dominican Republic, El Salvador, Haiti, Honduras, Thailand and Vietnam, and included boh our owned facilities and those of our third-party suppliers. This work indicated that we meet or exceed available GLWC benchmarks.

Since 2016, HanesBrands has also conducted extensive employee survey work and research in its owned facilities across the globe (including the Dominican Republic, Honduras, El Salvador and Vietnam) to understand whether our employees are earning a living wage. The research was conducted by two very experienced independent labor economists (Dr. Craig Richardson and Dr. Zagros Madjd-Sadjadi) who concluded that Hanes employees receive wages and benefits that far exceed a living wage. They found that HanesBrands’ employees in all four countries are accumulating significant durable assets, savings and are spending money on purely discretionary items – all key indicators of a living wage and of a household’s ability to meet the basic needs of the family and more.

Next Steps:

HanesBrands will continue to work with the FLA to develop a roadmap aligned with the FLA’s fair wage strategy. We will also conduct further wage analysis using available FLA fair wage tools across our supply base and continue the work begun by Doctors Richardsoon and Madjd-Sadjadi.

During the remainder of 2022 and in 2023 this will include:

• A detailed wage gap analysis of all owned manufacturing facilities and all key tier one suppliers. These facilities account for over 90% of our global unit volume;
• By the end of 2023, our goal is to complete the use of open cost modelling, to include wages as itemized costs in purchasing prices, at all tier one supplier facilities. We are using open cost modelling in the vast majority of these facilities now;
• Re-engage Doctors Richardson and Madjd-Sadjadi to help us conduct survey work at additional owned and tier one supplier facilities across our global network. This is in addition to the wage gap analysis described above.

In addition to HanesBrands’ Global Standards for Suppliers, we also remain committed to:

• Working with suppliers on sourcing, planning and manufacturing capacity practices that support fair treatment of workers;
• Providing suppliers with plans and forecasts on a regular basis so that facilities can plan their capacity accordingly;
• Adjusting timelines and delivery dates if excessive hours of work will be necessary to complete the purchase order;
• Defining lead times through the time and action calendar to ensure adequate lead times are provided.

We have and will continue to report publicly on our work on this important issue.

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