Living Wage SmartCheck

Are you concerned about the living wages of workers in your supply chain?

That’s where FLOCERT’s Living Wage SmartCheck comes in – we’re a global pioneer and trusted partner in helping companies achieve their living wage goals. We’re committed to helping you ensure that workers in your supply chain receive fair wages that cover their basic needs. We offer two approaches:

• Fairtrade: We support the Fairtrade Sustainable Banana Offer, part of Fairtrade´s living wage solution, so that all workers on Fairtrade-certified banana plantations benefit from additional bonus payments. Through our Living Wage SmartCheck, we verify that the Fairtrade Banana Bonus, provided as an additional contribution to close the wage gap, reached the workers. The verification primarily occurs during Fairtrade audits but can occur independently if necessary.
• IDH: We use the IDH Salary Matrix, a standardised tool that helps companies calculate and benchmark the salaries of the workers on plantations in their supply chain, based on job type, location and experience.

Our Living Wage SmartCheck includes onsite audits to verify that the data in the IDH Salary Matrix is complete and correct. If our assessment shows that the workers are not paid a living wage yet, you can use additional interventions to close this gap. Once you have made the investments, we can check that they have reached the workers and provide you with an assessment report.

The benefits of Living Wage SmartCheck

• Position your business as a sustainability leader and strengthen your brand image.
• Improve your ESG scores.
• Be more confident to meet requirements of existing and upcoming living wage and human rights due diligence.
• Gain transparency on your investments and confidence that they really reach the workers.
• Increase the credibility of your living wage claims through third-party verification.

How our Living Wage SmartCheck works

Fairtrade approach

Traders and retailers sourcing from Fairtrade-certified plantations contribute to better wages by paying the Fairtrade Minimum Price and Premium. However, studies show that in many countries, a significant gap remains between current wages and living wage benchmarks. The Fairtrade Banana Bonus helps close this gap by providing an additional voluntary payment directly to workers´ income.

During a Fairtrade audit, FLOCERT checks that Fairtrade plantations allocate up to 30% of their Fairtrade Premium toward covering any annual living wage gap. This check is part of the standard Fairtrade verification process. If business partners contribute additional funds to cover the remaining wage gap (Fairtrade Banana Bonus), FLOCERT can verify these contributions through on-site audits, as these voluntary contributions are not part of the standard Fairtrade audit. FLOCERT requires information on these additional contributions, including payment terms, to verify them at the plantation site, either in combination with a Fairtrade audit or as a standalone audit.

After the verification, an audit report will be provided. Additionally, a final report can be made available upon request. The final report includes an overview of assessments, a review of achievements and challenges, suggestions for improvements, and recommendations for planning further monitoring activities.

IDH approach

The IDH Salary Matrix verification process involves a comprehensive assessment of a company’s salary practices, including an analysis of job descriptions and salary data of its plantation workers. The verification is conducted by our local auditors who are trained and experienced in the use of the IDH Salary Matrix.

The auditor will verify that the wages are aligned with the matrix and that any discrepancies are addressed promptly and effectively. The data from the verified IDH Salary Matrix is then used to calculate the living wage gaps and the costs of closing those wage gaps in your supply chain.

Based on the audit findings, you and your business partners can plan and make targeted investments to close wage gaps and ensure that workers in your supply chain are earning enough to meet their basic needs. Lastly, to ensure that additional payments, in-kind benefits or bonuses have reached the intended beneficiaries, FLOCERT will audit the plantation again and verify that these transfers reached the workers successfully.