Migrant workers are among those hardest-hit by Covid-19. The worker rights organization Migrant Forum Asia calls for a justice mechanism to support the millions of migrant workers who have had their wages withheld. Even migrant workers who have lost their jobs and had their wages retained during the Covid-19 pandemic are forced to pay off recruitment fees—another reason why workers urgently need their wages to be paid. With a focus on recruitment fees, this briefing examines the commitments companies make and the steps they take to ensure that migrant workers’ rights are respected.
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KnowTheChain assessed 180 companies. Where data is broken down further, only samples of five or more companies are included. Thus the eight companies based in regions outside of Asia, Europe, and North America are not included in the regions tab. Similarly, Amazon and Walmart, two companies operating across sectors, are not included in sectors tab.
The table assesses whether companies have included a provision that prohibits worker-paid recruitment fees in a publicly available supply chain policy. It further looks at whether evidence of implementation in a company’s supply chains, namely whether a company discloses that recruitment fees have been reimbursed to supply chain workers, and/or whether companies can demonstrate a step-by-step process across sourcing countries that prevents workers from having to pay such fees.
No worker should have to pay for a job. Most readers of this page will not have to had paid fees in order to get their job—and neither should migrant workers in corporate supply chains. The Employer Pays Principle states that the costs of recruitment should be borne not by the worker, but by the employer.
According to the ILO, “recruitment costs can amount to nine months or more of average monthly earnings.” Such large sums leave workers in debt bondage, meaning they are forced to work in order to pay off the debt.
Further reading: Institute for Human Rights and Business (2018), “Recruitment Fees.”
Migrant workers in the apparel sector in Malaysia pay up to US$4,300 in recruitment fees. More than US$1.7 million in fees had been reimbursed to workers (or scheduled to be paid back).
Migrant workers at a supplier of an apparel brand in Thailand paid more $500 in recruitment fees, more than five times the amount allowed by Thai law (ca. US$90).
An ILO survey among migrant workers in Thailand found that workers in the agricultural sector on average had to pay US$431 in recruitment fees. This is significantly higher than the average monthly salary, at US$240.
In Summer 2018, 18-year-old Yudha was recruited for a fishing job by a labor broker on Facebook. He was promised US$450 per month, plus bonuses on a two-year contract. Only after he left his village in Indonesia did he find out that his salary would be only US$300 and that he was required to pay a US$900 “security deposit” and a US$750 administration fee. Yudha said his passport was confiscated once aboard the vessel, and that shifts lasted for 18 hours a day: “There was no break, except for eating and only five minutes,” said Yudha … “Sometimes, if a tuna came off a hook and the captain was angry at the missed catch, the crew would not eat at all.” While Yudha, unlike many of his colleagues, did not pay with this life, his pay for ten months at sea amounted to only US$638.
In Malaysia, some migrant workers had to pay 4-5 months’ wages (approx. US$1,000) in recruitment fees. For example, Batsa, a 25-year-old Nepalese worker had around US$1,800 deducted from his salary over the past 18 months to allegedly fund a new work permit. That is the equivalent to eight months of his basic wages and is evident from his payslips.
Electronics company reported that their suppliers reimbursed up to US$30 million to workers for recruitment fees.
- Work with suppliers and where relevant, peer companies to ensure that migrant workers receive remediation, including for recruitment fees and related costs and unpaid wages.
- Engage with workers on an ongoing basis to ensure the full extent of the recruitment fees and related costs are uncovered, meaningful remedy is being developed, and workers are satisfied with the remedy outcomes and not retaliated against.
- Contribute to the costs of remediation.
Further reading: Issara Institute (2021), “Repayment of Recruitment Fees to Workers. 4 Emerging Best Practices.”
- Incorporate the costs of meeting the Employer Pays Principle into payments to suppliers.
- This includes costs for recruitment fees, as well as related costs, such as costs for visa, medical checks, or travel.
- If recruitment costs are no longer to be absorbed by workers and are to be accounted for by companies and their suppliers, companies should be able to show that they have adapted their purchasing practices to allow for this.
For further details, see the ILO’s definition of recruitment fees and related costs.
In addition to adapting purchasing practices,
- Identify recruitment channels, including the recruitment agencies used, and the costs of recruitment fees
- Undertake in-depth monitoring to ensure workers did not have to pay fees (including for example a review of documents such as contracts with recruiters or letters regarding worker visa)
- Take steps to ensure that migrant workers verify the effectiveness of the process, i.e., are interviewed upon arrival in the destination country—and again after a few months once they feel more secure—as to whether they have paid recruitment-related fees.
For further details, see Institute for Human Rights and Business and Leadership Group for Responsible Recruitment, “Six Steps to Responsible Recruitment.” Accessed 9 May 2021.
Adidas reports that it is working with more than 20 recruitment agencies across Taiwan, Thailand, Philippines, and Vietnam as part of its work on recruitment fees. The company also discloses that it is part of a two-year partnership with the International Organization for Migration, which it states involves specialized training for recruitment agencies in sending countries and its business partners in receiving countries. Adidas states that through this partnership, it is also increasing engagement with second-tier suppliers that employ migrant workers. It also discloses that it is working to understand the costs of recruitment in different migrant corridors and high-risk countries such as Taiwan and Thailand, by conducting on-site investigations which include interviews with migrant workers and labor agencies. The company reports that as part of its efforts to tackle recruitment fees, it is focusing in particular on the corridors from Vietnam to Taiwan, the Philippines to Taiwan, and Myanmar to Thailand.
Asics reports that it introduced a grievance mechanism for migrant workers in factories in Thailand and Japan specifically, and discloses two instances of grievances received from migrant workers. It also discloses working with other brands to ensure that recruitment fees were repaid to workers. Its supplier list includes the percentage of migrant workers, demonstrating that it has mapped the migrant workforce in its first tier.
Burberry discloses that it is working with two of its suppliers as well as the NGO Issara Institute to develop “an ethical recruitment route for workers.” The company also reports that it is working on mapping recruitment journeys in high-risk hotspots which were identified through a human rights impact assessment. The company also discloses an example of the repayment of recruitment-related fees to workers at 11 supplier facilities, where workers had been charged for pre-employment health checks.
Lululemon discloses that it has been working with its suppliers in Taiwan to implement its no worker-paid fee programs. It states that as of the end of 2019, 18 out of 19 of its suppliers had achieved this, and that as a result, “2,700 workers benefitted from the eradication of recruitment fees.” The company reports that this involved nine quarterly working group sessions with suppliers that focused on building supplier capacity to manage responsible recruitment risks, and the company reports engaging recruitment agencies on its foreign migrant worker requirements. Lululemon states that it conducts assessments of recruitment agencies used by its suppliers which include reviewing personnel files of migrant workers, and that 20 in-country agencies and 20 overseas agencies, which are used by 15 out of 19 of its suppliers in Taiwan, have been assessed. The company reports that it has created a full-time role in Taiwan to support progress on these programs. It reports that the same program is being rolled out to other countries and that it has started to train suppliers and develop timelines with suppliers in Malaysia, Thailand, and Japan.
PVH discloses that it found that 112 migrant workers at a Thai supplier had paid recruitment-related fees relating to visas, health checks, and work permits amounting to US$22,900. It states that the supplier repaid the fees to workers and provided evidence of repayment to PVH, and changed its onboarding process to include interviews with migrant workers to determine whether fees had been paid. The company further discloses that the corporate responsibility committee of its board of directors which meets four times a year and monitors performance on social and human rights indicators. It states that this includes targets on the elimination of worker-paid recruitment fees and issues including the impacts of the Covid-19 pandemic on supply chain workers and human rights.
Nestlé states that the results of the Worker Voice-Driven Ethical Recruitment Program of the Issara Institute, an NGO working to address forced labor in supply chains, show that workers have verified that informal brokering has been eliminated from its supply chains in the context of its Thai seafood supply chains. It states that all of its Thai seafood suppliers have implemented responsible recruitment initiatives and discloses that, in 2019, almost 5,000 migrant workers of its first-tier suppliers in the seafood sector were recruited from Myanmar using recruitment agencies that have undergone responsible recruitment training. The company further discloses that the training it provided to farmers, traders, and recruitment agents—as well as migrant workers on working conditions, labor rights, and grievance and support procedures—resulted in a formal recruitment process being used for the first time with its Turkish hazelnut supply chains. It states that 366 workers, farmers, and labor brokers formed contracts before the hazelnut harvest. Nestlé notes that it is working with the labor research and consultancy organization Verité on strengthening pre-departure programs for Cambodian workers migrating to Thailand.
Tesco provided a concrete example of remediation of recruitment fees to supply chain workers. It discloses that it received reports through its grievance mechanism, supplier visits, and other channels, which revealed nine incidents at two sites in Thailand and Malaysia where workers were indebted to labor brokers through the payment of recruitment fees. Tesco states that it worked with its suppliers to ensure that the workers were compensated. It explains that it requires Thai and Malaysian suppliers to demonstrate an understanding of the costs and processes of migrant worker recruitment through analyzing all fees and costs incurred by migrant workers in the recruitment process in origin, transit, and destination countries. The company also discloses that it participates in the Ethical Trading Initiative’s Working Group for Italian Agriculture to mitigate risks relating to recruitment practices, including indebtedness and coercion. It states that the group engages with the Italian government for the establishment of a more formal recruitment process and that its suppliers of tinned tomatoes and salads are also part of the group.
Unilever reports that it supported a prevention and remediation workshop for a supplier in Malaysia to ensure adherence to the Employer Pays Principle and develop a corrective action plan to reimburse workers’ recruitment fees. The company also reports commissioning a study on migrant workers in Turkey’s tomato industry. It states that the study’s intent was to increase the company’s understanding of recruitment and working conditions and that it worked closely with its supplier in the process. It discloses that this assessment discovered a lack of written contracts, that migrant workers had paid recruitment fees in sending countries or regions, and little awareness of and transparency on wage deductions.
For further details, see KnowTheChain’s 2020 food and beverage sector report.
Apple discloses the cumulative amount of recruitment fees that has been reimbursed to workers since 2008, as well as the process by which it calculates reimbursement amounts. The amounts are determined by the fees identified through worker interviews and additional verification with labor agencies or suppliers. The company also outlines the repayment process with its suppliers: the supplier is notified of the violation; the supplier signs the probation and repayment terms; the supplier submits a repayment plan to Apple for approval; the supplier makes the repayment to the worker; and a third-party auditor verifies the payment at the supplier site.
Hewlett Packard Enterprise notes that in collaboration with the Verité, a labor research and consultancy organization, it mapped the legal regulations and financial costs of recruitment along a number of common recruitment corridors. It also discloses ensuring remediation of recruitment fees to workers in their supply chains, and training suppliers on responsible recruitment.
Intel reports that its suppliers have repaid US$14 million in fees to more than 12,600 workers since 2014. It also discloses fee repayments at eight second-tier suppliers in Japan and Korea. It further reports that it is working with ten suppliers on fee repayments in the third tier of its supply chains. Intel discloses that it has a process for mapping migrant worker journeys and recruitment channels in its supply chains. It reports that it asked 17 suppliers who employ migrant workers to carry out in-depth analyses of their processes for risk management. The suppliers were asked to cascade their policies to recruitment agents, map the journeys of migrant workers from home countries to factories, and assess the risks associated with those journeys.
For further details, see KnowTheChain’s 2020 report “No One Should Have to Pay For a Job: Responsible Recruitment in ICT Supply Chains.”
Data Visualisation by Toby Rubenstein.
Research for apparel and footwear companies was conducted through November 2020 or through February 2021, where companies provided additional disclosure or links.
Information for food and beverage and electronics companies is based on KnowTheChain’s 2020 benchmarks.