The University of Wisconsin-Madison and five other universities participated in a pilot project to monitor overseas locations where their licensed merchandise is manufactured. Five factories were inspected in Costa Rica, El Salvador, Korea, Mexico and Taiwan.

The following is a breakdown of the results by factory, followed by recommendations to improve workplace monitoring.

COSTA RICA

This factory produces T-shirts and jerseys and employs 170 workers, mostly women ages 22-44. The annual turnover rate is 5 percent. Audits were conducted six months apart. One manager and 15 workers were interviewed (first audit, 11 interviews on site, four off site; second audit, nine interviews on site, six off site). Thirteen workers expressed satisfaction in working at the factory, 12 on the second audit.

Key Findings

• No codes of conduct or personnel policies posted. None posted at reaudit.
• No evidence of pay below minimum wage/lack of legally mandated benefits.
• No evidence of 60-plus-hour work hours per week. Disagreements over mandatory overtime. On reaudit, draft personnel policy encourages but doesn't mandate overtime.
• Evidence of requirement that production quotas be met before overtime compensation.
• No evidence of child labor/forced labor.
• Numerous health and safety recommendations, with poor factory compliance on ventilation, safety gear, sanitation.
• Inappropriate questions about pregnancy status persist on second audit. Compliance with local law on harassment improved on reaudit.
• Some evidence of interference with free association, but worker organizations formed.

This factory produces T-shirts and jerseys and employs 520 workers, most of whom are ages 22-43 and married with children. The annual turnover rate is 12 percent. During the first audit, two managers and 12 workers were interviewed (11 on site, 1 off site). All reported satisfaction with their jobs. The second audit was not allowed by management, which cited the disruption of workers and the aggression of interviews as reasons for the denial.

Key Findings

• No codes of conduct or personnel policies posted. Personnel policies do exist and cover all but wages/deductions.
• No evidence of pay below minimum wage/lack of legally mandated benefits.
• Pay slips do not clearly differentiate regular from overtime wages.
• No evidence of routine 60-plus-hour work weeks. Disagreements over voluntary/mandatory overtime.
• No evidence of failure to pay overtime rate, but not all workers aware of its existence.
• No evidence of child labor/forced labor.
• Numerous health and safety issues: ventilation, temperature, safety equipment (although worker accounts of each vary).
• Some evidence of pregnancy testing, although it is varied.
• No evidence of sexual harassment or abuse.
• No evidence of prohibition of free association of workers, although some report lack of awareness of the right.

This factory produces baseball-style caps and employs 38 workers, typically married woman in their early 30s. The annual turnover rate is 15 to 20 percent. Two managers and 15 workers were interviewed (first audit 11 on site, 4 off site; second audit all on site). Thirteen of 15 workers said they were satisfied with the factory during the first audit, and all 15 expressed satisfaction during the second audit.

Key Findings

• Code of conduct is posted, but no local labor laws. Personnel policies posted and comprehensive in content. No workers aware that grievance procedures included, none aware that the policies are posted. On re-audit, increased awareness but not total. Local/national laws still not posted, personnel policies not complete as to harassment.
• No evidence of pay below minimum wage, some indication of lack of legally mandated benefits (30 days maternity leave instead of 60; some workers say no paid leave given).
• Pay slips show both regular and overtime rates, but many workers report ignorance of calculations. These findings remained on reaudit.
• No evidence of 60-plus-hour routine work week or lack of appropriate overtime compensation.
• No evidence of child/forced labor.
• Health and safety issues on fire safety, sanitation, ventilation (evidence uneven). Reaudit shows some adjustment, not comprehensive.
• No evidence of discrimination/harassment or abuse.
• Workers unaware of right to unionize. On reaudit, all aware of right but no union.

This factory produces undergarments, pants and shirts and employs 193 workers, typically single women ages 19-39. The annual turnover rate is 10 percent. Two managers and 15 workers were interviewed (first audit, six off site; second audit, seven off site). Ten workers expressed satisfaction in their jobs during the first audit, with seven saying they were satisfied during the second audit.

Key Findings

• No codes of conduct, labor laws or personnel policies posted. Workers were unaware of such laws or policies. On reaudit, the code of conduct was posted, but nothing on labor laws or personnel policies.
• No evidence of pay below minimum wage; some evidence that workers are unaware of how pay is calculated.
• Pay slips don't clearly differentiate between overtime and regular compensation. No evidence of failure to receive legally mandated benefits. Problems persist on reaudit.
• No evidence of 60-plus-hour work week; some mandatory overtime reported. On reaudit, all workers said overtime is voluntary.
• Some evidence of failure to pay legally required overtime rate. On reaudit, some evidence of worker confusion over calculations, but no evidence of inappropriate overtime compensation.
• No evidence of child labor/forced labor.
• Health and safety: same kinds of concerns as other sites, better responses on reaudit but still problems.
• Some evidence of pregnancy testing, persists on reaudit despite denials.
• Some evidence of sexual and verbal harassment; no report of harassment on reaudit and some managerial investigation, although no action taken as a result.
• Some evidence of interference with free association; management says there is a union. On reaudit, workers still complain, management denies problem.

This factory manufactures jackets and shirts. It employs 28 foreign contract workers and 60 production workers. The typical employee is a woman, age 30. Two managers were interviewed during each audit, with 27 workers interviewed at the first audit (mostly on site) and 20 workers interviewed at the second audit (10 off site). All workers reported general satisfaction with the jobs.

Key Findings

• Code of conduct posted, no labor laws posted. A compendium of labor laws (200 pages) is available to workers. Personnel policies verbally explained. On reaudit, labor laws were posted.
• No evidence of pay below minimum wage, but some denial of legal benefits (paid leave). Also, finders' fees for employment were above the legal limit. Most of these problems persisted on reaudit.
• No 60-plus-hour work week, no evidence of denial of overtime wage.
• No evidence of child/forced labor.
• Health and safety conditions mostly favorable, although excessive dirt and dust persist.
• No evidence of discrimination or harassment.
• Workers unaware of right to free association. Lack of knowledge still exists on reaudit.

• Encourage more communication between monitors and licensees about the auditing and reporting process, its strengths, and its limitations before the audits begin.
• Define more specifically the roles and responsibilities of monitors and licensees. During the course of the pilot project, it became clear that the auditors and some of the licensees at times considered certain responsibilities to fall within the other's purview.
• Provide specific information about standards in advance of the initial audit, including how they are adopted and applied, to give greater opportunity for questions and discussion.
• Provide a feedback mechanism between factory management and Verite to give the factories a greater sense of involvement in the process. For example, input and feedback could be solicited from recently audited factories by letter asking for their opinions on the audit and the way it was conducted. During the course of the pilot project, one factory questioned auditors' identification and confidentiality of the worker interviews, but had no formal way to register their questions concerning the monitoring process. As one licensee termed it, factory management does not feel "heard" in the current process.
• Strengthen consensus between monitors, licensees and factory management around the audit process in general, which would improve communication flow and factory support of monitoring.
• Work towards the creation and adoption of industry-wide standards. This matter is becoming one of urgency for the factories that are being monitored by different buyers' monitors several times a month.
• Clearly define the expectations of all participants for the outcome of the project.