Wages

Key takeaways

  1. A company paying below the minimum and/or living wage/poverty line of a region should be addressed.

  2. On the contrary, a company's contribution to prosperity can be captured when it pays fair wages, overtime pay, and providing benefits.

  3. Compare information on the company’s wages (in USD or EUR) versus the median and average salaries of people working in the specific region in which the company is located.

  4. Ensure to include how many employees are impacted and research on the impact of employees getting paid under the poverty line or at/above the living wage.

What are they?

A wage is compensation paid to employees for their work. Wages are always paid based on a certain amount of time.

Unfair wages include:

  • Failure to pay (minimum) wage: laws require employers to pay workers for their work. Some countries even have a minimum wage. However, some countries/regions may have a minimum wage below the living wage. In this case, it would be appropriate to discuss a company’s low wages if it falls below the region’s living wage, even if it is higher than the minimum wage.

  • Withholding overtime pay or other wages: when an employer fails to pay an eligible worker their owed overtime, it may be considered a violation of employment laws. This can also include when an employer withholds benefits like retirement funds or disability payments.

SDG choice

✅ SDG 1

✅ SDG 8

Impact assessment

Describe the company’s wage policy for its employees and/or suppliers. How many people is it affecting, where, and how much? When determining how many employees are impacted, consider their entire supply chain.

It is important to show the company’s average AND median salary in addition to the minimum wage AND living wage of the region.

If the impact is negative, to cover this topic to its fullest potential, you can explore the following: 

  • The CEO's wage ratio compared to its employees' average base salary, also known as the CEO-to-typical-worker Compensation Ratio.
  • If a company is paying the living wage, assess whether it is also increasing the wages of the lowest-paid.
  • Whether the wage disparity is increasing because of cash incentives and/or bonus schemes between different management levels.
  • Compensation discrimination can briefly be touched upon in terms of gender and ethnic pay gaps.


If the impact is positive, to cover this topic to its fullest potential, you can explore the following:

  • Address whether the company is paying fair wages and providing overtime pay. 
  • Does the financial compensation reach or exceed the living wage of the region the company is in?
  • Does the company have minimum wage policies and provision of benefits? 
  • A company's contribution to prosperity can be captured by assessing how a workforce is attracted, retained, and motivated.


Ensure all of this data is parallel (salary per hour, month, or year) and in $USD or €EUR. You may read this article to understand the difference between reporting median and average.


Describe the scale of the impact by taking into account:


1/ The breadth of the impact

  • Is the impact local, national, or global?

  • How many people are concerned? Thousands? Hundreds of thousands?

2/ The depth of the impact

  • Is the life of people concerned deeply affected, or does the issue just marginally impact them?

  • Are the changes brought by the issue profoundly changing society?

3/ The persistence of the impact

  • How long would the impact described last for? Months? Years? Decades?

  • How reversible is the impact described in the impact analysis? Can it be easily stopped/extended?



Use the logical model to discuss the company’s output, outcome, and impact. You may use studies as proxies to report the impact.



Source

https://files.epi.org/pdf/2045...

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