Better Work Vietnam Thematic Synthesis Report on Compensation

15 Aug 2016

The latest sample covers 207 factories assessed once between October 2014 and October 2015. Based on findings from these assessments, this thematic report examines in closer detail some of the more salient issues related to the Compensation cluster, providing further insights into the key drivers of non-compliance and the obstacles faced when trying to advocate for improvements at the factory level. Where relevant and useful, these explanations are supported by short case studies informed by Better Work Enterprise Advisors’ observations at the factory level in Vietnam.

In the second part of the report, we examine trends from a smaller sample of factories that have been assessed four times, once each year since the inception of the programme. These findings provide an indicative picture of how compliance has evolved over time and points to areas of suggested priority in the coming years to address areas experiencing consistently low and/or decreasing compliance.

[accordion_group animation=”bottom-to-top”]
[accordion_item icon=”hb-moon-highlight” title=”More than eight out of ten factories failed to meet legal requirements on paid leave,”]which refers primarily to the accuracy and timeliness of payments for leave entitlements, including public holidays, annual and maternity leave. At the question level, non-compliance is concentrated on the late settlement of sick and maternity leave claims (75 percent of factories are non-compliant), and the incorrect payment of annual leave (37 percent of factories are non- compliant).[/accordion_item]

[accordion_item icon=”hb-moon-highlight” title=”Half of factories are non-compliant for the Compliance Point Wage Information, Use and Deductions,”]mostly due to the continuing prevalence of multiple or inaccurate payrolls (“doublebook-keeping”), which affects almost 50 percent of factories.[/accordion_item]

[accordion_item icon=”hb-moon-highlight” title=”More than 60 percent of factories are non-compliant on at least one aspect of overtime pay.”]A key driver of non-compliance is the use of an inaccurate formula for calculating overtime pay, which ends up underpaying workers in certain months.[/accordion_item]

[accordion_item icon=”hb-moon-highlight” title=”Almost four in ten factories (38 percent) fail to comply with laws on social security and other benefits,”]the biggest problem being the timely and correct payment to social, health andunemployment insurance funds. Just over a quarter of factories don’t collect and forwardworker contributions to social insurance funds on time, while 12 percent don’t pay the employer contribution to social insurance to uncovered workers (e.g. temporary workers).[/accordion_item]

Better Work publishes compliance synthesis reports for each of its country programmes, presenting analysis of non-compliance at the aggregate level. The goal of these reports is to provide transparent information for all programme stakeholders regarding working conditions in the factories participating in the programme.

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