Created in partnership with the Helpdesk on Business & Human Rights

Living Wage

Today, over a billion working people worldwide – one third of all workers – are estimated to earn less than they need to afford a decent standard of living.

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Due Diligence Considerations

This section outlines due diligence steps that companies can implement to promote living wages in their operations and supply chains. The described due diligence steps are aligned with the UN Guiding Principles on Business and Human Rights (UNGPs). Further information on UNGPs is provided in the ‘Key Human Rights Due Diligence Frameworks’ section below or in the Introduction.

While the below steps provide guidance on living wages in particular, it is generally more resource-efficient for companies to ‘streamline’ their human rights due diligence processes by also identifying and addressing other relevant human rights issues (e.g. child labourforced labourdiscrimination and freedom of association) at the same time.

Key Human Rights Due Diligence Frameworks

Several human rights frameworks describe the due diligence steps that businesses should ideally implement to address human rights issues, including poverty wages. The primary framework is the UN Guiding Principles on Business and Human Rights (UNGPs). Launched in 2011, the UNGPs offer guidance on how to implement the United Nations “Protect, Respect and Remedy” Framework, which establishes the respective responsibilities of Governments and businesses — and where they intersect.

The UNGPs set out how companies, in meeting their responsibility to respect human rights, should put in place due diligence and other related policies and processes, which include:

  • A publicly available policy setting out the company’s commitment to respect human rights;
  • Assessment of any actual or potential adverse human rights impacts with which the company may be involved across its entire value chain;
  • Integration of the findings from their impact assessments into relevant internal functions/processes — and the taking of effective action to manage the same;
  • Tracking of the effectiveness of the company’s management actions;
  • Reporting on how the company is addressing its actual or potential adverse impacts; and
  • Remediation of adverse impacts that the company has caused or contributed to.

The steps outlined below follow the UNGPs framework and can be considered a process which a business looking to start implementing human rights due diligence processes can follow.

Additionally, the OECD Guidelines on Multinational Enterprises define the elements of responsible business conduct, including human and labour rights.

Another important reference document is the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (MNE Declaration), which contains the most detailed guidance on due diligence as it pertains to labour rights. These instruments, articulating principles of responsible business conduct, draw on international standards enjoying widespread consensus.

The UN Global Compact SDG Ambition accelerator programme tackles a range of human rights issues and has a specific SDG Ambition on Living Wage. The UN Global Compact Business and Human Rights Accelerator is a hands-on programme that walks companies through six stages towards establishing an ongoing human rights due diligence process to help them move from commitment to action on human rights and labour rights.

Additionally, the SME Compass offers guidance on the overall human rights due diligence process by taking businesses through five key due diligence phases. The SME Compass has been developed in particular to address the needs of SMEs but is freely available and can be used by other companies as well. The tool, available in English and German, is a joint project by the German Government’s Helpdesk on Business & Human Rights and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.

1. Develop a Policy Commitment on Living Wage

UNGP Requirements

As per the UNGPs, a human rights policy should be:

  • “Approved at the most senior level” of the company;
  • “Informed by relevant internal and/or external expertise”;
  • Specific about company’s “human rights expectations of personnel, business partners and other parties directly linked to its operations, products or services”;
  • “Publicly available and communicated internally and externally to all personnel, business partners and other relevant parties”; and
  • “Reflected in operational policies and procedures necessary to embed it throughout the business”.

Building on commitment and support of senior leadership, businesses can develop policies on living wages that require their own workers — regardless of their employment status — to be paid a living wage and can also require or encourage suppliers to pay a living wage to their own employees. In some countries, businesses can commit to becoming ‘Living Wage Employers’ and align their policies and practices to guidance from living wage authorities, such as the Living Wage Foundation in the UK or Living Wage for US in the USA. Unilever has been a Living Wage accredited employer in the UK since 2021, and since 2015 has achieved its goal to pay a living wage to all employees by 2020. Unilever also committed to ensuring all workers who directly provide goods and services to Unilever earn at least a living wage or a living income by 2030.

Living wage policies should be clearly identified in public policy documents to ensure transparency and accountability. For instance, in 2020, L’Oréal Group made two commitments regarding living wages, which are reflected in policy documents and programmes (see Case Studies).

Businesses may also consider aligning their policies with relevant industry-wide or cross-industry policy commitments on wages and benefits, for example:

Helpful Resources
  • United Nations Global Compact, Achieving the Living Wage Ambition: Reference Sheet and Implementation GuidanceThe UN Global Compact SDG Ambition on Living Wage provides illustrative details regarding the steps to take to successfully implement a living wage programme in a company’s business system to ensure 100% of employees across the organization earn a living wage.
  • Ethical Trading Initiative, Base Code Guidance: Living WagesA step-by-step guide to improving wages in supply chains, including a section on integrating living wage policies in existing codes of conduct and policies.
  • United Nations Global Compact-OHCHR, A Guide for Business: How to Develop a Human Rights Policy: This guidance provides recommendations on how to develop a human rights policy and includes extracts from companies’ policies referencing fair wages and compensation.
  • SME Compass: Provides advice on how to develop a human rights strategy and formulate a policy statement.
  • SME Compass, Policy statement: Companies can use this practical guide to learn to develop a policy statement step-by-step. Several use cases illustrate how to implement the requirements.
  • UN Global Compact Labour Principles, Advancing decent work in business Learning Plan: This learning plan, developed by the UN Global Compact and the International Labour Organization, helps companies understand each Labour Principle and its related concepts and best practices as well as practical steps to help companies understand and take action across a variety of issues.
  • Fairtrade, People and Planet in Business: This guide provides small and micro companies with the tools to start or strengthen their due diligence process in line with international frameworks.

2. Assess Actual and Potential Impacts on Employee Wages

UNGP Requirements

The UNGPs note that impact assessments:

  • Will vary in complexity depending on “the size of the business enterprise, the risk of severe human rights impacts, and the nature and context of its operations”;
  • Should cover impacts that the company may “cause or contribute to through its own activities, or which may be directly linked to its operations, products or services by its business relationships”;
  • Should involve “meaningful consultation with potentially affected groups and other relevant stakeholders” in addition to other sources of information such as audits; and
  • Should be ongoing.

Impact assessments should look at both actual and potential impacts, i.e. impacts that have already manifested or could manifest. This compares to risk assessment that would only look at potential impacts and may not satisfy all of the above criteria.

Assessing the actual and potential impacts on wages in operations and supply chains can be difficult as a living wage has many tangible and intangible impacts that are largely felt outside of the work environment, such as employees’ ability to pay for healthcare or education, potentially for several dependents. Social security schemes play a crucial role in protecting against ill-health, poverty, inequality and social exclusion. Yet they are often under-developed (in scope and/or level of benefits provided) in countries where very low wages are prevalent.

In order to do an impact assessment on wages, businesses should consider taking the following steps:

  • Determine the definition of a living wage: As part of the assessment of actual or potential impacts on employee wages, it is important for companies to understand that the concept of a living wage is different from common compensation reference points, such as external competitiveness and industry standards, as well as the underlying principles and processes for determining minimum wages in many countries. This process will involve determining the elements of the base compensation and assessing wages against the living wage benchmark. For successful implementation of a living wage programme, it is, therefore, important to have a clear definition of a living wage, as well as a list of countries and categories of workers that will be included in the programme.
  • Assess the gap between current basic pay and living wages: Companies should then map the current pay levels for all workers and all types of contracts (current salary levels of full-time employees, part-time and temporary workers). In addition, the various components of the compensation package (wages, benefits, Government or employer-provided social protections) must be identified and an analysis done to determine which elements of compensation can be included in the compensation that will be compared to the living wage benchmark. Assessing gaps between current pay and what would be a living wage should be done for employees in each country of operation and — as part of a commitment to promote a living wage in supply chains — in countries where suppliers are based. In that case, companies can prioritize key suppliers or suppliers that present high risks of impacts.

The assessment should also consider the causes and consequences of the wages received by workers — for instance, are the wages low because of unsustainable procurement practices that keep wages low, or because of industry practices and lack of incentives to address low wages? Such assessments may require engagement and input from social partners such as trade unions and worker representatives, as well as stakeholders and suppliers.

Countries such as the UK and the USA have national and regional living wage calculations that businesses can align with, but many countries do not have such a reference. In these cases, businesses can, as a first step, identify a reliable external partner who will provide the living wage data for relevant locations and guidance toward paying workers a living wage. Organizations such as the Global Living Wage CoalitionBSRFair Wage NetworkFair Wear Foundation and Wage Indicator provide living wage data across multiple countries, and to a certain degree, implementation guidance. Examples of country-specific organizations include the Asia Floor Wage AllianceLiving Wage Foundation UK, Living Wage New Zealand and the MIT Living Wage Calculator.

Of course, it is not enough that workers are, in principle, paid a living wage. Those wages need to be protected from unauthorized deductions, excessive fines, limited use of payment in kind, delayed payment and bankruptcy. Otherwise, there is the risk that the company may try to claw back the gains achieved in introducing a living wage. This is a critical part of the broader context that should also inform the company’s wage policy.

Following this assessment, any gaps identified between the pay grade and the living wage benchmark should be addressed by the location-operation by way of a wage adjustment work plan, including timelines, to align employee compensation levels with those of a living wage — see next due diligence step.

Helpful Resources
  • United Nations Global Compact, Achieving the Living Wage Ambition: Reference Sheet and Implementation Guidance: The UN Global Compact SDG Ambition on Living Wage provides illustrative details regarding the steps to take to successfully implement a living wage programme in a company’s business system to ensure 100% of employees across the organization earn a living wage.
  • United Nations Global Compact, Living Wage Analysis Tool: This free, user-friendly and strictly confidential online tool helps companies identify actions and further opportunities to provide a living wage to ensure all workers, families and communities can live in dignity.
  • United Nations Global Compact, Improving Wages to Advance Decent Work in Supply Chains: This interactive microsite highlights lessons learned and best practices from companies and organizations on tackling low pay in supply chains and provides guidelines on concrete steps companies and their suppliers can take to improve wages globally.
  • United Nations Global CompactThe Poverty Footprint — A People-Centred Approach to Assessing Business Impacts on Sustainable Development: An assessment tool that enables companies and civil society partners to understand corporate impacts on multidimensional poverty. As a tool to help implement the SDGs, the Poverty Footprint provides a comprehensive overview of factors that influence poverty, and it emphasizes stakeholder engagement and partnership between companies and civil society as a means for establishing pro-poor business strategies.
  • United Nations Global Compact, Decent Work Toolkit for Sustainable Procurement: A Toolkit that enables companies, procurement professionals and suppliers to develop a common understanding on how to advance decent work through purchasing decisions and to scale up efforts to improve lives around the globe. With a focus on trust and transparency, the Toolkit contains real-life examples of buyers and suppliers jointly addressing decent work concerns in global supply chains.
  • ILO, Working Conditions Laws Database: This online database provides information on the regulatory environment for working conditions in over 100 countries.
  • ILO, Statistics on Wages: A collection of data on wages in different countries.
  • IDH, The Sustainable Trade Initiative, Roadmap on Living Wages: A list of all living wage benchmarks as recognized by IDH.
  • Ethical Trading Initiative, Living Wages in Global Supply Chains: A New Agenda for BusinessPractical advice on assessing the impacts of living wages in the supply chain.
  • CSR Risk Check: A tool allowing companies to check which international CSR risks (including related to minimum and living wage) businesses are exposed to and what can be done to manage them. The tool provides tailor-made information on the local human rights situation as well as environmental, social and governance issues. It allows users to filter by product/raw material and country of origin. The tool was developed by MVO Netherland; the German version is funded and implemented by the German Government’s Helpdesk on Business & Human Rights and UPJ.
  • Fairtrade, People and Planet in Business: This guide provides small and micro companies with the tools to start or strengthen their due diligence process in line with international frameworks.
  • SME Compass: Provides advice on how to assess actual and potential human rights risks and how to assess and prioritize risks.
  • SME Compass, Risk Analysis Tool: This tool helps companies to locate, asses and prioritize significant human rights and environmental risks long their value chains.
  • SME Compass, Supplier review: This practical guide helps companies to find an approach to manage and review their suppliers with respect to human rights impacts.

3. Integrate and Take Action on Living Wage

UNGP Requirements

As per the UNGPs, effective integration requires that:

  • “Responsibility for addressing living wage impacts is assigned to the appropriate level and function within the business enterprise” (e.g. senior leadership, executive and board level);
  • “Internal decision-making, budget allocations and oversight processes enable effective responses to such impacts”.

To take action on living wages, companies should develop an implementation plan to increase wages to meet or exceed a living wage. Specific steps can include:

  • Developing internal management procedures for implementation: Following gap assessment, companies can develop internal management procedures for implementing the living wage programme. The living wage programme would ideally be integrated into processes and procedures that already exist within the company for reviewing and setting compensation levels around the world. Implementing a living wage programme can be achieved through a centralized process, which may involve a cross-departmental working group.
  • Raising awareness: Training on living wage programmes can ensure effective implementation. Training materials may include a detailed focus on the specific processes and milestones necessary to successfully implement the programme. This should include specification of the departments and functions responsible for gathering and distributing the living wage data to the assessment teams, the timing and processes by which the assessment will take place, the procedure for the assessment team to lodge questions and comments, the framework for creating the wage adjustment plans and securing the related approval processes, and the vehicle for reporting the results of the assessment to internal stakeholders.
  • Engaging with social partners in living wage discussions to ensure the successful implementation of a living wage programme. Companies should engage with trade unions and acknowledge the role of social dialogue in the wage-setting process. For social dialogue to be effective, it is important to have a solid foundation of respect for the fundamental rights of freedom of association and the effective recognition of the right to collective bargaining.

As well as taking action within their own operations, businesses can take the following steps to promote living wages through supply chains:

  • Engaging with suppliers to work towards increased wages for workers in the supply chain. Some companies have commitments to work with their suppliers to ensure the provision of living wages to supply chain workers. One of the supplier engagement strategies that businesses could consider is helping suppliers improve their productivity to ‘compensate’ them for the additional labour costs they may incur in paying living wages. This may include adopting and/or financing new technologies to improve production efficiency and operationalizing new production techniques (e.g. through training).
  • Improving purchasing practices by empowering and training procurement teams to adopt sustainable practices that will impact their suppliers’ capacity to advance decent work. Close engagement and collaboration with procurement colleagues will enable a better understanding of concerns in relation to how purchasing practices can affect wage levels, and also how purchasing decisions can affect outcomes for workers in supply chains. Technical elements will need to be covered, such as open-book costing, labour-minute costing and ring-fencing labour cost, to ensure that commercial functions can effectively support public commitments to achieving a living wage in the supply chain. Clarifying purchasing practices that can be deployed to support joint work with suppliers to raise wages, as well as mapping, consolidating and shortening supply chains, may be crucial to living wage efforts. Additionally, companies can increase leverage with suppliers through longer-term buying commitments and defining an approach to equitable cost-sharing.
  • Promoting freedom of association and collective bargaining to help involve workers in setting living wage levels. Social dialogue allows workers and employers to identify a pathway towards a living wage together. While conflicting expectations may arise, social dialogue can help by delivering a compromise based on gradual but continuous increases of wage levels. Social dialogue also promotes and protects the effective enforcement of a living wage. This includes, but is not limited to, monitoring the implementation of wage levels agreed upon through a social dialogue process.
    • Where freedom of association and collective bargaining are not restricted in law, a company could work with suppliers and business partners to uphold the right to organize and bargain collectively. An example of companies working with trade unions to increase wages in supply chains is a collaboration between Inditex and IndustriAll in Bangladesh.
    • Where legal restrictions make it impossible or very difficult to organize and/or bargain collectively, companies may choose to establish alternative mechanisms (such as workers’ committees in which the workers select their representatives) for their employees and encourage their suppliers to do likewise. Workers’ committees do not have any of the rights and protections afforded to trade unions, and hence do little to support the empowerment of workers. Nonetheless, where the alternative of organizing does not exist, the participation of a workers’ committee, which is as independent as possible from management control, could provide workers with a voice in defining living wages.
  • Coordinating efforts with industry groups, workers’ and employers’ organizations and civil society to take collective action and advocate for higher and stricter minimum wage laws, and where possible a living wage. Examples include the Business for Inclusive Growth Platform, a coalition led by the OECD, or the work of the Fair Labor Association and their recent letter to the Tamil Nadu authorities on behalf of companies like Ralph Lauren, Gap and VF Corp.
Helpful Resources
  • United Nations Global Compact, Improving Wages to Advance Decent Work in Supply Chains: This interactive microsite highlights lessons learned and best practices from companies and organizations on tackling low pay in supply chains and provides guidelines on concrete steps companies and their suppliers can take to improve wages globally. The report gives tips and case studies on implementing a living wage throughout businesses.
  • United Nations Global Compact, The Decent Work Toolkit for Sustainable Procurement: This platform can help companies, procurement professionals and suppliers to develop a common understanding on how to advance decent work through purchasing decisions and scaling up efforts to improve lives around the globe.
  • ILO, A Methodology to Estimate the Needs of Workers and Their FamiliesThis technical document provides a detailed description of a methodology that can be used by researchers to estimate the needs of workers and their families in different country circumstances.
  • IDH, The Sustainable Trade Initiative, Better Business Through Living WageBest practice and guidance for businesses on implementing living wage policies and practices with suppliers, including the IDH Salary Matrix that helps evaluate how the total remuneration (including wages, bonuses, cash and in-kind benefits) compares to relevant living wage benchmarks.
  • Oxfam, Steps towards a Living Wage in Global Supply Chains: This briefing gives tips and steps for businesses to implement living wage throughout their supply chains, including a table of self-assessment indicators.
  • Ethical Trading Initiative, Base Code Guidance: Living WagesPractical guidance on implementing living wages in global supply chains, including how to take action.
  • Ethical Trading Initiative, Living Wages in Global Supply Chains: A New Agenda for Businesspractical guide to implementing living wage throughout global supply chains.
  • SME Compass: Provides advice on how to take action on human rights by embedding them in your company, creating and implementing an action plan, and conducting a supplier review and capacity building.
  • SME Compass, Identifying stakeholders and cooperation partners: This practical guide is intended to help companies identify and classify relevant stakeholders and cooperation partners.
  • SME Compass, Standards Compass: This online tool offers guidance on what to pay attention to when selecting sustainability standards or when participating in multi-stakeholder initiatives. It allows comparing standards and initiatives with respect to their contribution to human rights due diligence and their potential limitations.
  • Fairtrade, People and Planet in Business: This guide provides small and micro companies with the tools to start or strengthen their due diligence process in line with international frameworks.

4. Track Performance on Living Wage

UNGP Requirements

As per the UNGPs, tracking should:

  • “Be based on appropriate qualitative and quantitative indicators”;
  • “Draw on feedback from both internal and external sources, including affected stakeholders” (e.g. through grievance mechanisms).

Performance on living wages can be tracked by monitoring the wages paid to employees and workers in supply chains in comparison to the living wage figure for the country or region the workers reside in. As the living wage calculation is based on changing indicators in different markets — such as regional cost of living, taxes, cost and availability of public services — it is crucial for companies to establish processes for monitoring and updating the living wage levels to reflect these changes. As well as wages, other remuneration or compensation details are important to assess — such as any bonuses or workplace benefits — and the number of hours worked.

The Salary Matrix developed by IDH (The Sustainable Trade Initiative) helps companies evaluate how total remuneration to workers, including wages, bonuses, cash and in-kind benefits, compares to the relevant living wage benchmarks. The Poverty Footprint, an assessment tool developed by UN Global Compact and Oxfam, provides insight into indicators when measuring performance on living wage. An example of a key indicator is tracking the general trend of earnings in recent years in comparison to the cost of living.

Using technologies such as analytics and machine learning can help companies automate the wage calculation gap based on changing macroeconomic data (e.g. cost of living) and assessments of compliance across the business.

Data on wages paid in the supply chain may be hard to acquire, so constructive engagement with suppliers is important to ensure the correct data is gathered. Inditex has partnered with several organizations, including ACT, to ensure dialogue with suppliers is constructive. H&M has also worked with several organizations to implement their Fair Living Wage Strategy. The UN Global Compact SDG Ambition on Living Wage gives a range of tips on how to engage with suppliers to ensure correct data is gathered, impacts are understood, and performance is tracked.

Helpful Resources
  • United Nations Global CompactAchieving the Living Wage Ambition: Reference Sheet and Implementation GuidanceThe UN Global Compact SDG Ambition on Living Wage provides illustrative details regarding the steps to take to successfully implement a living wage programme in a company’s business system to ensure 100% of employees across the organization earn a living wage.
  • United Nations Global Compact, The Poverty Footprint — A People-Centred Approach to Assessing Business Impacts on Sustainable DevelopmentAn assessment tool that enables companies and civil society partners to understand corporate impacts on multidimensional poverty. As a tool to help implement the SDGs, the Poverty Footprint provides a comprehensive overview of factors that influence poverty, and it emphasizes stakeholder engagement and partnership between companies and civil society as a means for establishing pro-poor business strategies.
  • Ethical Trading Initiative, Base Code Guidance: Living WagesPractical guidance on implementing living wages in global supply chains, including KPIs on living wages.
  • Fairtrade, People and Planet in Business: This guide provides small and micro companies with the tools to start or strengthen their due diligence process in line with international frameworks.
  • SME Compass: Provides advice on how to measure human rights performance.
  • SME Compass: Key performance indicators for due diligence: Companies can use this overview of selected quantitative key performance indicators to measure implementation, manage it internally and/or report it externally.

5. Communicate Performance on Living Wage

UNGP Requirements

As per the UNGPs, regular communications of performance should:

  • “Be of a form and frequency that reflect an enterprise’s human rights impacts and that are accessible to its intended audiences”;
  • “Provide information that is sufficient to evaluate the adequacy of an enterprise’s response to the particular human rights impact involved”;
  • “Not pose risks to affected stakeholders, personnel or to legitimate requirements of commercial confidentiality”.

Companies are expected to communicate their performance on living wages commitments and policies in a formal public report, which can take the form of an annual company or CSR report, such as Schneider Electric, or in an annual Communication on Progress (CoP) in implementing the Ten Principles of the UN Global Compact. Companies may also choose to share living wage information via social media and websites, such as Unilever and Aviva. Key information shared usually includes the percentage of the workforce that is paid a living wage and the status of living wage discussions with suppliers.

Companies that are part of living wage alliances or foundations are also able to communicate their progress via the organization’s channels, such as UK businesses that are listed as accredited employers on the Living Wage Foundation registry.

Helpful Resources
  • UNGP Reporting Framework: A short series of smart questions (‘Reporting Framework’), implementation guidance for reporting companies, and assurance guidance for internal auditors and external assurance providers.
  • United Nations Global Compact, Communication on Progress (CoP): The CoP ensures further strengthening of corporate transparency and accountability, allowing companies to better track progress, inspire leadership, foster goal-setting and provide learning opportunities across the Ten Principles and SDGs.
  • World Benchmarking Alliance, Social Transformation Framework: This framework assesses and incentivizes the 2,000 most influential companies to support social transformation and sets out expectations on human rights, decent work and ethical conduct, including living wage standards.
  • Global Reporting Initiative, GRI 401: Employment: This standard addresses the topic of employment, including an organization’s approach to hiring, recruitment, retention and related practices, and the working conditions it provides. GRI 401 also covers the employment and working conditions in an organization’s supply chain, including adequate remuneration.
  • The Sustainability Code: A framework for reporting on non-financial performance that includes 20 criteria, including on human rights and employee rights.
  • Fairtrade, People and Planet in Business: This guide provides small and micro companies with the tools to start or strengthen their due diligence process in line with international frameworks.
  • SME Compass: Provides advice on how to communicate progress on human rights due diligence.
  • SME Compass, Target group-oriented communication: This practical guide helps companies to identify their stakeholders and find suitable communication formats and channels.

6. Remedy and Grievance Mechanisms

UNGP Requirements

As per the UNGPs, remedy and grievance mechanisms should include the following considerations:

  • “Where business enterprises identify that they have caused or contributed to adverse impacts, they should provide for or cooperate in their remediation through legitimate processes”.
  • “Operational-level grievance mechanisms for those potentially impacted by the business enterprise’s activities can be one effective means of enabling remediation when they meet certain core criteria.”

To ensure their effectiveness, grievance mechanisms should be:

  • Legitimate: “enabling trust from the stakeholder groups for whose use they are intended, and being accountable for the fair conduct of grievance processes”
  • Accessible: “being known to all stakeholder groups for whose use they are intended, and providing adequate assistance for those who may face particular barriers to access”
  • Predictable: “providing a clear and known procedure with an indicative time frame for each stage, and clarity on the types of process and outcome available and means of monitoring implementation”
  • Equitable: “seeking to ensure that aggrieved parties have reasonable access to sources of information, advice and expertise necessary to engage in a grievance process on fair, informed and respectful terms”
  • Transparent: “keeping parties to a grievance informed about its progress, and providing sufficient information about the mechanism’s performance to build confidence in its effectiveness and meet any public interest at stake”
  • Rights-compatible: “ensuring that outcomes and remedies accord with internationally recognized human rights”
  • A source of continuous learning: “drawing on relevant measures to identify lessons for improving the mechanism and preventing future grievances and harms”
  • Based on engagement and dialogue: “consulting the stakeholder groups for whose use they are intended on their design and performance, and focusing on dialogue as the means to address and resolve grievances”

Workers may find that they are not being paid enough, that their wages are being withheld or that unauthorized or unlawful deductions were made, and so may wish to complain. Businesses should have grievance mechanisms in place for their own employees to confidentially raise complaints regarding wages and should also require suppliers to provide their own grievance mechanism. Some companies provide suppliers with a helpline to enable their workers to raise complaints, while others use third parties to get feedback from workers, e.g. the Ethical Trading Initiative and the Fair Wear Foundation.

Remedy for poverty wages can include increasing wages to a living wage and/or providing back payment to workers for work done on previously inadequate wages.

Helpful Resources
  • Ethical Trading Initiative, Access to Remedy: Practical Guidance for Companies: This guidance explains key components of the mechanisms that allow workers to submit complaints and enable businesses to provide remedy.
  • Global Compact Network Germany, Worth Listening: Understanding and Implementing Human Rights Grievance Management: A business guide intended to assist companies in designing effective human rights grievance mechanisms, including practical advice and case studies. Also available in German.
  • Fairtrade, People and Planet in Business: This guide provides small and micro companies with the tools to start or strengthen their due diligence process in line with international frameworks.
  • SME Compass: Provides advice on how to establish grievance mechanisms and manage complaints.
  • SME Compass, Managing grievances effectively: Companies can use this guide to design their grievance mechanisms more effectively – along the eight UNGP effectiveness criteria – and it includes practical examples from companies.