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.

Minimum wage is considered a baseline on the way to 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, while also collaborating with other companies and organizations such as multi-stakeholder initiatives.

By further promoting responsible purchasing practices, we can have a decisive influence on improving wages at our suppliers’s side, because we would then be able to enable them to plan their production and working hours effectively and pay employees fairly. At HUGO BOSS, we are committed to assessing our purchasing practices through the ACT questionnaires, and to improve them continuously.

For us, responsible purchasing practices mean:

• long-term trust and partnerships including responsible exit from business relationships
• collaborative planning and forecasting
• respectful and continuous dialog with suppliers regarding handling of orders and associated payments
• training on responsible sourcing and buying

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.

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, provided for example by Fair Wear Foundation. Besides, our purchasing department is encouraged to attend an e-learning program about responsible purchasing practices and fair and open cost calculation.

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 centered on purchasing practices and living wage.

On a short term:
Progressive improvement of wages at select pilot suppliers until 2025. 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 finished goods suppliers by 2030.

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

2019: 

• As one of the first steps in our Living Wage journey, we collected wage data from our strategic finished goods 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.

2021: 

• The next step was to collect wage data from our strategic suppliers in EMEA (Europe, Middle East, Africa) and AMER (the Americas) . 
• By the end of 2021, we had collected wage data from more than 60 suppliers in 16 countries.
• In addition, we established a HUGO BOSS Task Force to promote living wages. In this context, we are promoting cross-departmental-engagement linking  sustainability, purchasing and HR  and defining accountability to uphold our commitment.
• 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 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 finished goods suppliers with a focus on the strategic partners.

2022 – 2025:

WAGES:

We have started working on our first pilot projects with  four suppliers in Bangladesh, Vietnam, and Sri Lanka in collaboration with relevant multi-stakeholder and local organizations. To move forward, the following activities are planned:

• Joint agreement with suppliers 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 2025.

PURCHASING PRACTICES

• We will derive Individual measures: These will be based on the assessment of our pilot suppliers, 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.

MULTI-STAKEHOLDER-ENGAGEMENT

• We will continue to engage in joint actions on Living Wage with other brands and multi-stakeholder initiatives. For example, we will join the upcoming initiative “Living Wage Lab 2.0” of the  Partnership for Sustainable Textiles. HUGO BOSS will, for the next two years, participate in the multi-stakeholder iInitiative “Learning and Implementation Community on Responsible Purchase Practices” (LIC) .