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A living wage

Average read time: 5 minutes

Workers deserve a living wage – and fair pay brings benefits for families, communities and our business. We want to raise living standards by ensuring everyone who directly provides goods and services to Unilever earns a living wage or income.

Middle aged woman in a hat holding her hand up to show her palm

Fairer pay for a fairer world

Building on our commitment to pay a living wage in our own business, in 2021 we set a groundbreaking new goal that’s part of our Unilever Compass.

Ensure that everyone who directly provides goods and services to Unilever will earn at least a living wage or income by 2030.

This is one of our Raise living standards goals

We know that economic growth is only inclusive and sustainable when workers receive fair wages – and our business flourishes when those around us are doing well. Making sure that workers earn a living wage helps support economies and fosters growth. And it’s simply the right thing to do for a business that is founded on respect for human rights. So we’re advocating living wages through many platforms and building alliances to create momentum for the change we want to see.

Our living wage commitment for employees

We created our Framework for Fair Compensation (PDF 191.39 KB) in 2014. Through the first of its five principles we committed to pay all our employees a living wage, which we’ve achieved since 2020. We’ve updated our Code of Business Principles to endorse this commitment.

Every year, our country leaders confirm that they have complied with our Code. And we require each country business to report its status against the standards of our Framework.

We check we're paying our employees a living wage by auditing compliance against our Framework each year. Our audits check that:

  • fixed compensation is achievable without the need to work an excessive number of hours
  • our country payroll processes deliver employees’ full pay correctly and on time, every time
  • we have no issues of unequal pay between genders.

We’ve worked closely with the Fair Wage Network (FWN) and others to develop our understanding of living wages. FWN provided an objective external source of the living wage amount for each of the countries where we have employees.

Fork lift truck driver moving a pallet of cardboard boxes labelled OMO in China

We used these thresholds to assess whether the fixed compensation paid to all our full-time direct employees (including factory and non-factory employees) in each country met our living wage standard – which means employees receive, at the very minimum, fixed and guaranteed levels of earnings that are above their country’s living wage benchmark. In some countries, such as those under the Gulf Cooperation Council, there are no legal minimum wages mandated by the government – which meant we needed to identify a substitute for the legal minimum wage as an initial wage floor or starting level.

Extending our approach

Fair wages have always been a principle of our Responsible Sourcing Policy (RSP) and Responsible Business Partner Policy, which govern how we ask our suppliers and other partners to do business. In 2022 we’re updating our RSP to include the requirement for suppliers to pay a living wage, a requirement that we’ll phase in across different portfolios. See human rights in our value chain for more detail.

In 2020 we added the principle of a living wage to our Code of Business Principles: “We will work with our business partners to raise standards so that their employees are paid a living wage and are not subject to forced, compulsory, trafficked or child labour.” We also have a specific internal policy for temporary workers in manufacturing who are provided by third parties.

To make our living wage goal a reality, we’ve put an action plan in place that builds on the progress we’ve made through our RSP. We’re looking at where the gaps between actual and living incomes are greatest, where the social safety net for workers is weakest, and where we can make the most impact, based on our presence and scale in local markets. Using these criteria, we’ve identified six priority markets – Brazil, China, India, Indonesia, Philippines and Vietnam – and are creating implementation plans at country and portfolio level.

We’re focusing on the most vulnerable workers in manufacturing and agriculture, and we’ll work with our suppliers, other businesses, governments and NGOs – through our purchasing practices, collaboration and advocacy – to create systemic change and champion the global adoption of living wage practices.

We’ve prioritised implementation of our manufacturing plans on the basis of the proximity of the operations or services to Unilever. This includes the temporary workers on our sites and our collaborative (third-party) manufacturing. For our agricultural supply chain, we’re focusing on five key crops that are important to our business – tea, palm, vanilla, cocoa and vegetables. After assessing living income gaps for the farmers of these crops, we’re developing tailored implementation plans.

Two men in a field assess the quality of a cauliflower

Partners with purpose

Through our Partner with Purpose programme for suppliers, we’re finding innovative and impactful ways to deliver on our ambitious commitments and generate mutual growth.

Advocacy for change

Advocacy and collaboration will play key roles in our efforts to raise living standards through living wages and incomes, because many stakeholders must be involved in creating an enabling environment.

We’re advocating living wages through existing collaboration platforms and by forming new public–private alliances at the country level, as well as engaging in dialogue with governments.

We aim to mobilise like-minded companies to close the gap between minimum and living wages and incomes in their operations, influence governments to institute and implement living wage and income policies, and to build cross-sector coalitions to drive systems change on living wages/incomes.

We’re seeing growing momentum on living wages, including from our investors. For example, the Platform for Living Wage Financials is an alliance of 17 financial institutions managing over €4 trillion of assets which encourages and monitors companies' efforts to address living wages in global supply chains. We’ve been recognised for our efforts and placed top in its food and agriculture ranking. We’re also supporting a multi-partner study on the business benefits of adopting living wages.

Similarly, we’re seeing a more aligned approach from expert organisations working on living wage methodologies and data, which is an essential step in progressing this complex agenda. A good example is the UK Living Wage Foundation’s proposal to create a living wage community of practice in 2022. And we’re continuing to support the creation of a publicly accessible, global database of living wages as we believe that living wage data which is free of charge and available to all would support easier living wage implementation.

The cover of Unilever’s Human Rights Report 2021

Our Human Rights Progress Report 2021 (PDF 2.81 MB)

Our latest Report gives more detail on how we’ve started to implement our living wage and living income commitment and how we’re mobilising partners to drive change. Our Human Rights Report 2020 also details our work and partnerships.

Downloads

Human Rights Report 2020 (PDF 7.13 MB)

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