Verité & 6 Corporate Partners Uncover Excessive Overtime in Chinese Factories

On September 7, 2004, Verité released our latest research study, “Excessive Overtime in Chinese Supplier Factories: Causes, Impacts, and Recommendations for Action.” The report highlights what has become a widespread problem for companies that source in ‘the world’s workshop,’ southern China.

The manufacturing industry in China accounts for over 40 million jobs for Chinese workers. The movement of factories by U.S. based companies to China has driven economic growth and created an increased standard of living. At the same time, poor working conditions and the lack of social, cultural, and environmental protections of workers are not sustainable for the global workplace. Specifically, excessive overtime has become an endemic problem in Chinese factories and of serious concern to the companies and workers with whom Verité works.

Excessive overtime is defined as work hours that exceed the legal limit or the 60 hours per week standard in most corporate Codes of Conduct. Verité has identified excessive overtime as a widespread and systemic problem in the Chinese export industry: over 93% of 142 Chinese factories audited by Verité for international brands during 2002 and 2003 had instances of excessive overtime.

Verité conducted in-depth research into the issue in 2003 by teaming with several corporate sponsors with production in China, including Timberland, Eileen Fisher, Sears and The Warehouse, Ltd. The report relied on first-hand interviews with 768 workers and 44 management personnel in 41 export factories in southern China. The report showed that workers frequently exceeded the legal maximum of 20 hours per week of overtime during both peak and non-peak production periods.

Working excessive hours takes its toll on workers, many of whom reported fatigue, exhaustion, stress, sadness and depression. Common medical ailments included eyestrain and back pain. Chinese medical and legal professionals noted the threat of more severe ailments, such as hospitalization due to prolonged exposure to toxic chemicals.

The report concluded by offering detailed recommendations for action for multiple stakeholders:

For Western Companies Outsourcing to China

• Improve factory–buyer communication to avoid delays in design that lead to excessive overtime.
• Increase support to factory management to ensure compliance with overtime and occupational safety and health standards.
• Provide technical assistance and training to factories on production planning that can help reduce the need to employ overtime.
• Create internal planning mechanisms that decrease the need for overtime, including reduction in frequent and late changes in design specifications.

For Chinese Factories

• Ensure that workers know that overtime is voluntary, and that supervisors support voluntary decision-making on the part of workers.
• Eliminate all illegal punitive measures like salary deductions, work point demerits and ‘absences’ due to missed overtime that contribute to making overtime involuntary.

For Chinese Government Agencies

• Build capacity and capability among labor inspectors to monitor factory compliance with legal requirements.
• Establish clear time limits for the use of the Comprehensive Work Hour Calculation system that protect workers from excessive overtime hours.

For the All-China Federation of Trade Unions and other Worker Bodies

• Ensure that workers in supplier factories receive all compensation due to them under the law with regard to regular hours, overtime premiums and benefits.
• Work with factory managers to ensure proper training on the extra safety precautions that should be taken during overtime shifts.

Verité’s next step is to facilitate the development of multi-stakeholder solutions to solve the issues of excessive overtime. As one overarching solution to the problem, the report cited the need for greater cooperation among companies, factories and the Chinese government. The report also offered several recommendations made by the factory management personnel, such as updating the order process, improving communications between factories and buyers, streamlining the provision of raw materials and allowing subcontracting.

The findings from this initiative are applicable to a broad range of industries in China including apparel, footwear, accessories, knitting and textiles, electronics, and food processing. Verité will continue to catalyze discussions of this type among corporations, regulatory bodies and NGOs to identify solutions to long-standing problems.

To download a complete copy of the report in Englsih, click here. For a copy in Chinese, click here.