Wages of workers in our supply chain

This commitment also aptly describes the definition of living wages. Therefore, all our producers are regularly monitored by independent Fair Wear auditors who carefully examine the remuneration of employees. This is done by checking payroll records and working time records. Interviews with workers are conducted for confirmation. VAUDE receives a detailed list of payment figures with local and international benchmarks. This helps us to quickly recognize the wage levels of our producers.

When we examine wages based on the definition of living wages, we can see that while the average wages of our producers are well above the minimum wage, they fall short of the living wage benchmark.

Let’s examine wages again, including allowances, bonuses, and other variable wage components (excluding overtime). It’s evident that wages are close to or sometimes at the level of living wages.

However, for our efforts to achieve living wages, we do not include these variable wage components. Here, we focus solely on wage components defined by the living wage criteria.

A living wage is meant to be earned during a regular workweek, without overtime, allowances, or bonuses, and should cover the living expenses of a worker and their family.

We operate as one of many companies in our production facilities and share responsibility with our partners to a limited extent. As an individual entity, we cannot independently raise wages for all workers.

Nevertheless, we are committed to taking responsibility for our products. To fulfill this commitment, we have collaborated closely with selected partners to develop a method that allows us to meet our responsibilities effectively.

We have calculated the production costs of our products based on living wage benchmarks. This means we pay higher prices for our products, thus contributing to living wages through VAUDE Share. The more manufacturers also make this contribution, the faster we can achieve our goal of ensuring living wages for workers in our production facilities.

Fulfilling our responsibility through VAUDE Share for some of our products does not mean that only those working on VAUDE items receive higher wages. The VAUDE Share is fairly distributed among all workers at the production facility.

At our long-term partner Tah Hsin in Myanmar, we have been paying the VAUDE Share for every product manufactured for us since the Winter 2024 season. Our orders occupy about 50% of this production facility's capacity. This means that with our VAUDE Share, we can cover approximately 50% of the wage gap between current wages and living wages.

Our partner Tah Hsin supports our initiative and takes responsibility for fair wages by covering the remaining 50% to achieve living wages for its production facility.

We are proud to have long-standing partners who willingly participate and share our ideas and values.

From the Winter 2024 collection, all workers at this production facility have been receiving a living wage. Payments are made monthly along with regular wages, and this is regularly verified externally by SMART Myanmar.

Our calculation is based on the living wage demand of STUM (Solidarity Trade Union of Myanmar). Fair Wear also recommends adhering to this living wage benchmark.

According to the OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector, wages are an industry risk. We have identified the following risks for our supply chain:

• Incorrect calculation of overtime wages.
  What are we doing about it? We’re engaging in dialogue with our producers and working together to make improvements.

• Various absences are not properly compensated.
  What are we doing about it? We’re engaging in dialogue with our producers and working together to make improvements.

• Wages do not cover the cost of living for workers and their families.
  What are we doing about it? Wages are assessed in audits and annual wage surveys and compared to living wage benchmarks. Additionally, we work with pilot producers on transparent calculations to see the wage costs in the product and contribute to living wages through VAUDE Share.

The above-mentioned risks are potential risks with an increased likelihood of occurrence.

Inspections carried out by Fair Wear show that wage levels are usually above the statutory minimum. Nevertheless, all audits carried out by Fair Wear included objections regarding "payment of a living wage", and deviations from the Living Wage Benchmark were uncovered. This benchmark is being advanced because the minimum wage in many countries is not sufficient to provide a decent standard of living. 

In countries where the Global Living Wage Coalition's benchmark (calculated using the Anker methodology) is available, we rely on it and compare it with the wages paid. Unfortunately, comprehensive benchmarks for living wages are not yet available for all countries and regions.

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