Lowest non-compliance rate on double payroll in five years

12 Aug 2020

Double payroll is a non-compliance issue which not only affects workers but also all stakeholders in the garment industry. It happens when management pays workers outside of the main payroll, including incentives for overtime and extra wages. This practice can decrease contributions to national social security and may prejudice workers’ retirement, pensions and fees in case of sickness or accidents.

Another disadvantage is that workers are unaware of the composition of their actual salary, incentives and goals. To decrease non-compliance, Better Work Nicaragua developed a dialogue process to inform all involved stakeholders. Delivering training to inspectors on how to identify double payrolls was crucial to this process. As part of our advisory process, our team also worked closely with factory managers to help monitor compliance on this issue. We also raised awareness among workers of the importance in accounting for everything so that it does not affect their pension and social security. Through interactions with union leaders, the message was shared with
all employees. Due to these efforts, only one factory with 137 workers is still not compliant.

In 2014, half of the factories were offering double payroll, affecting around 7,521 people. We found no violations on the following issues:

♦ Properly-installed alarm systems: For at least two years, Better Work Nicaragua and specialists from the fire department have provided emergency preparedness training for the majority of factories. These training sessions raised awareness among workers and management, which led to this significant improvement.
♦ Time off for breastfeeding breaks for female workers: From January to June 2019, trainings on sexual harassment prevention in the work place, risk management for
pregnant workers and gender perspective in factories’ policies and procedures were delivered to 52 management representatives.
♦ Bullying, harassment or humiliating treatment in any factory: In 2019, a total of 17 factories’ supervisors went through supervisory skills training. In addition, 52 middle managers from 11 factories participated in a leadership skills programme.

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