Fair Pay

We aim to ensure fair compensation among our global partners. Paying fair wages is not only the basis for long-term trust and partnership but is also a prerequisite for employees to have a decent standard of living. We, therefore, aim to create the right conditions and scalable solutions towards fair compensation in our supply chain.

The minimum wage is regarded as a fundamental basis for suppliers and is an essential step towards improving wages in the direction of a living wage. We expect all suppliers to meet the nationally applicable statutory minimum wage as well as observe and comply with the national regulations for health and social welfare systems. In addition, we demand that suppliers respect the right of their employees to receive information on individual salaries (e.g. through detailed salary statements).

Corporate due diligence entails the knowledge of one’s own supply chain. In this context, and to support our target for achieving living wages for the employees of our partners, we strive for more transparency in our own supply chain. These efforts are based on wage data assessments and gap analyses of our finished goods suppliers, using recognized benchmarks for living wages. With a data and strategy driven approach, we define a step-by-step roadmap for living wages together with our suppliers.

We consider all purchasing practices that do not compromise the human rights of workers in the supply chain to be responsible. By promoting responsible purchasing practices, we contribute to fair working conditions and play a crucial role in improving wages. At HUGO BOSS, we are committed to evaluating and continuously improving our purchasing practices against the Common Framework for Responsible Purchasing Practices (CFRPP).

For us, responsible purchasing practices mean:

• mutually trustful and long-term partnerships
• responsible exit from business relationships
• joint planning and production forecasts
• respectful and continuous dialog with suppliers about the processing of orders and associated payments
• mandatory training on responsible sourcing

We recognize collective bargaining including the right of freedom of association and are committed to ensuring that these rights are granted to employees within our sphere of influence. Employees shall be free to negotiate in social dialogs tailor-made solutions and binding agreements on working conditions and wages. Wherever possible, the binding agreement is aimed to be on an industry level. If necessary, we support our suppliers in dialog with their various stakeholders or offer them training programs or consulting services.

For the management and workers of our suppliers and for our own employees we promote capacity building. In this context, we encourage our suppliers to participate in specific trainings in an e-learning platform with 70+ different training topics in relevant human rights, such as working hours and fair labor practices, and management areas.

As we consider fair compensation as a human right, we work with initiatives such as the Fair Labor Association (FLA) to further promote this right. Additionally, we are actively involved in the Partnership for Sustainable Textiles, for example, in initiatives and working groups centred on purchasing practices and living wage. We are also establishing communication and cooperation with other companies in order to share best practices and discuss possible solutions to the challenges together.

On a short term:
Progressive improvement of wages at select pilot supplier until 2027. The goal of the pilot is to achieve a sustainable increase in wages towards living wage or at least the defined target wage.

On a long term:
Scalable solution towards fair compensation in our supply chain with a focus on Tier 1 suppliers by 2030.

Our concrete actions to achieve fair compensation in our global supply chain are in alignment with our strategy and targets.

2019 - 2021: 

• As one of the first steps in our Living Wage journey, we collected wage data from our strategic Tier 1 suppliers in APAC (Asia Pacific) . We prioritized the analysis of high-volume partners and countries where there is a high risk of employees not being paid a living wage. In the next step, we collected wage data from our strategic EMEA (Economic Region Europe, Middle East and Africa) and AMER (Economic Region The Americas) suppliers. By the end of 2021, we had collected wage data from more than 70 suppliers in 18 countries. 
• We are promoting cross-departmental-engagement linking  sustainability, purchasing and HR  and defining accountability to uphold our commitment.
• To this end we have set up a HUGO BOSS Task Force that will continue to drive forward the issue of living wages.
• We developed the HUGO BOSS Living Wage Strategy with its seven guiding principles.
• We conducted a survey on responsible purchasing practices using the ACT questionnaires, both, internally and with our suppliers, and  defined action plans, for example,  to implementing internal training and developing metrics for responsible purchasing.

2022:     

• Based on the wage data collection and gap analysis, and to tackle the issue in a systematic and collaborative way, we developed a comprehensive action plan, tools and trainings, and engagement for a successful living wage pilot project.

2023:

• We developed a report  for the Fair Labor Association (FLA) called Fair Compensation Blueprint (updated version). It articulates our priorities and describes how we will implement changes or test new approaches to improve worker pay.
• We have published a detailed wage data analysis. This includes data from our most important sourcing countries, with a focus on strategic Tier 1 suppliers.

2024:

• Participation in the "Living Wage Lab 2.0" initiative, led by the Partnership for Sustainable Textiles, with other brands.
• Participation in the multi-stakeholder initiative “Learning and Implementation Community on Responsible Purchase Practices” (LIC).
• Obtaining and updating wage data from our strategic Tier 1 suppliers.
• Developing internal guidelines for responsible purchasing practices in collaboration with Procurement and other internal stakeholders. These include both the approach of mandatory responsible purchasing and an indication of the level of progress we are aiming for in the future.

We continuously collect and analyze wage data from our suppliers on an ongoing basis. Detailed information can be found here, in our supply chain compensation analysis.

We are committed to continuously collecting and analyzing wage data from our Tier 1 suppliers with a focus on the strategic partners.

2024 – 2027:

WAGES:

We have started projects to get first experience with four suppliers in Bangladesh, Vietnam, and Sri Lanka. In 2024 we changed the focus from a broader pilot approach to a single supplier in Bangladesh. You can get an insight into our pilot projects here in our case study. To move forward, the following activities are part of the pilot:

• Joint agreement with the supplier on remediation priorities to bring wages closer to the living wage levels
• Focus on: collective bargaining through social dialog, wage management systems, empowerment, overtime reduction, fair share, gender gap, and individual living wage
• We continuously monitor and evaluate the activities and the progress towards the defined goals . The final impact measurement is planned at the end of the pilot in 2027.

PURCHASING PRACTICES

• We will derive individual measures: These will be based on the assessment of our pilot supplier, in line with the Common Framework for Responsible Purchasing Practices (CFRPP).
• It is expected that better purchasing and efficiency through manufacturing excellence will lead to a positive impact on workers’ wages.
• HUGO BOSS will continue to operationalize living wages and responsible purchasing practices within the company by providing awareness training sessions to nominated buyers.
• On this solid foundation, HUGO BOSS can significantly improve its internal purchasing process and promote effective and efficient cooperation with suppliers. In this context, HUGO BOSS strives to continue its path of continuous improvement through appropriate measures in 2026 and 2027.

MULTI-STAKEHOLDER-ENGAGEMENT

• We will continue to engage in joint actions on Living Wage with other brands and multi-stakeholder initiatives. For example, we have joined the initiative “Living Wage Lab 2.0” of the  Partnership for Sustainable Textiles.