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Tracking Chart - Nonprofit organization dedicated to ending by tyndale

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									FLA Audit Profile                                                                                                                                Note from Company: Effective November 7, 2007 the company has discontinued business with the [factory].
                                                                                                                                                 The reason behind this decision stems from endemic lack of Human Rights compliance. During PVH's history
Country                                               HONDURAS                                                                                   of operations with the [factory], we have intervened to ensure workers rights to organize freely and collective
Factory name                                          100029423E                                                                                 bargaining have been upheld and respected by factory management. In brief, as a result of our intervention,
IEM                                                   ALGI                                                                                       organizing workers were rehired and an union was formed at [factory]. During subsequent years, we continued
                                                                                                                                                 our compliance efforts, and engaged in remediation as part of our periodic audits. Most recently, we have
Date(s) in facility                                   Oct 9-10, 2006                                                                             addressed all issues resulting from the FLA - PVH audit. However, after persistent efforts by our Regional
PC(s)                                                 Phillips-Van Heusen Corp.                                                                  Leader and Compliance Manager to engage the factory in remediation over an extended period, the factory
                                                                                                                                                 management disputed the findings by FLA and made no progress toward resolving the issues. Simply put, the
Number of workers                                     850                                                                                        factory management has not been interested in this process. Please note that PVH and the factory agreed to
Product(s)                                            GARMENTS                                                                                   conduct an independent external monitoring audit with an acceptable IEM to both parties so we could resolve
Production processes                                  CUTTING, SEWING AND ASSEMBLY                                                                the dispute. Consequently, [monitor] was selected. Their follow-up audit resulted in extremely discouraging
                                                                                                                                                 findings, thus leading to our decision to discontinue our business relationship with the [factory].

                                                                                                                                                                                                                                        IEM Findings                                                                                                            Remediation                          [Status]
FLA Code/ Compliance issue                            Country Law/Legal Reference           FLA Benchmark                                        Non-compliance                     Risk of Non-compliance                                    Evidence of Non-     If not corroborated, Sources/Documentation Notable        PC Remediation plan                  Target     Company Documentation Completed;
                                                                                                                                                                                                                                             compliance            explain why          used for corroborating Features                                           Completion follow up             Pending;
                                                                                                                                                                                                                                             (uncorroborated)                                                  implemented                                        Date       (Cite date            On-going
                                                                                                                                                                                                                                                                                                               by Factory                                                    of follow
                                                                                                                                                                                                                                                                                                               Management                                                    up)
                                                                                                                                                                                                                                                                                                               or Company
1. Code Awareness
Code posting/information                                                                    FLA Principle of Monitoring, Obligation of           Company has provided a                                                                                                               Management and                         Will conduct training to               31-Jan-07
                                                                                            Companies: Establish and articulate clear,           Code of conduct in the                                                                                                               workers interviews                     supervisors and give them
                                                                                            written workplace standards. Formally convey         language spoken by workers                                                                                                                                                  copies of PVH's Code of
                                                                                            those standards to Company factories as well         and has also communicated                                                                                                                                                   Conduct. Will also instruct
                                                                                            as to licensees, contractors and suppliers.          code obligations directly to                                                                                                                                                supervisors to train their
                                                                                                                                                 management, but although                                                                                                                                                    workers on PVH’s Code of
                                                                                                                                                 Facility normally employs over                                                                                                                                              Conduct.
                                                                                                                                                 800 workers, PC has only
                                                                                                                                                 directly informed
                                                                                                                                                 approximately 40 workers
                                                                                                                                                 about its CoC in the last two
                                                                                                                                                 years.

Worker/management awareness of Code                                                         FLA Principle of Monitoring, Obligation of           PC COC was observed                                                                                                                  Management and                         COC has been posted in areas           Completed
                                                                                            Companies: Ensure that all Company                   posted in an area only                                                                                                               workers interviews                     transited by both men and
                                                                                            factories as well as contractors and suppliers       transited by female employees                                                                                                                                               women.
                                                                                            inform their employees about the workplace           (administrative hallway). Male
                                                                                            standards orally and through the posting of          employees do not have
                                                                                            standards in a prominent place (in the local         access to this passageway
                                                                                            languages spoken by employees and                    and thus information is not
                                                                                            managers) and undertake other efforts to             accessible to them.
Confidential non-compliance reporting channel                                               FLA Principle of Monitoring,standards on a
                                                                                            educate employees about the Obligation of            As per review of                                                                                                                     Management/employee                    PVH has posted COC posters             Completed
                                                                                            Companies: Develop a secure                          documentations, in the last                                                                                                          interviews and                         throughout the facility and have
                                                                                            communications channel, in a manner                  two years, PC has provided                                                                                                           walkthrough of the                     also attached to them fax
                                                                                            appropriate to the culture and situation, to         business cards to                                                                                                                    facility.                              numbers and email addresses
                                                                                            enable Company employees and employees of            approximately 40 workers that                                                                                                                                               so that workers can
                                                                                            contractors and suppliers to report to the           were interviewed by PC                                                                                                                                                      confidentially report to PVH
                                                                                            Company on noncompliance with the                    auditors. There is no other                                                                                                                                                 directly any code violations.
                                                                                            workplace standards, with security that they         confidential noncompliance
                                                                                            shall not be punished or prejudiced for doing        reporting mechanism
                                                                                            so.                                                  observed.



2.Forced Labor
There will not be any use of forced labor, whether in the form of prison labor, indentured labor, bonded labor or otherwise
Freedom of Movement                                Honduras Labor Code: Part II. If factory entrances are locked or guarded to                   Facility policy is for employees                                                                                                     Employee, security                     As a security measurement, the
                                                   Contracts of employment,             prevent non-employee access to the premises              to require a written permission                                                                                                      guard and supervisors                  Free Zone Park administration
                                                   Chapter 1, Art.19: The               for security reasons, employees will have free           by management in order to                                                                                                            interviews. Additionally               permit workers to exit the
                                                   expression "Continuous               egress at all times.                                     be allowed by security guards                                                                                                        a physical evidence of                 premises only with the written
                                                   authority" implies an obligation on                                                           (Industrial Park guards) to                                                                                                          the permission form.                   authorization of their employers.
                                                   the worker's part to carry out the                                                            leave the facility premises                                                                                                                                                 This is not a policy of [factory],
                                                   employer's orders and                                                                         during their lunch break. The                                                                                                                                               this is a policy of the Park for all
                                                   instructions, whether given in                                                                forty five minute lunch break                                                                                                                                               factories.
                                                   person or through some other                                                                  is not paid.
                                                   person.
3. Child Labor
No person will be employed at an age younger than 15 (or 14 where the law of the country of manufacture allows) or younger than
the age for completing compulsory education in the country of manufacture where such age is higher than 15.
Other                                                                                                                                                                               During the audit, no presence of child labor was                                                  Review of company
                                                                                                                                                                                    detected. The HR practices and employee files show                                                policies and HR
                                                                                                                                                                                    that an age verification is performed. However, as per                                            manager interview.
                                                                                                                                                                                    HR manager, the facility has no written policy on age
                                                                                                                                                                                    verification.
4. Harassment or Abuse
Every employee will be treated with respect and dignity. No employee will be subject to any physical, sexual, psychological or
verbal harassment of abuse.
Other                                                                                                                                                                               As per HR Manager, there is no written policy on                                                  Review of company
                                                                                                                                                                                    harassment and abuse, but all employees are informed                                              policies and HR
                                                                                                                                                                                    during hiring that harassment or abuse towards other                                              manager interview.
                                                                                                                                                                                    employees will not be tolerated
5. Nondiscrimination
No person will be subject to any discrimination in employment, including hiring, salary, benefits, advancement, discipline,
termination or retirement, on the basis of gender, race, religion, age, disability, sexual orientation, nationality, political opinion, or
social or ethnic origin.
Other                                                                                                                                                                               As per HR Manager, there is no written policy on non-                                             Review of company
                                                                                                                                                                                    discrimination but all employees are informed during                                              policies and HR
                                                                                                                                                                                    hiring that religious, sexual or other types of                                                   manager interview.
                                                                                                                                                                                    discrimination towards other employees will not be
                                                                                                                                                                                    tolerated.
6. Health and Safety
Employers will provide a safe and healthy working environment to prevent accidents and injury to health arising out of, linked with,
or occurring in the course of work or as a result of the operation of employer facilities
Safety Equipment                                                                            All safety and medical equipment (such as fire       There are ten first aid kits all                                                                                                     Facility walkthrough                   By the end of January, all first       31-Jan-07
                                                                                            fighting equipment, first aid kits, etc.) shall be   of which were checked. Nine                                                                                                                                                 aid kits will be re-stocked with
                                                                                            in place, maintained as prescribed and               were found to be missing                                                                                                                                                    the necessary supplies,
                                                                                            accessible to the employees                          gloves, eyewash bottles and                                                                                                                                                 including gloves, eyewash
                                                                                                                                                 bandages.                                                                                                                                                                   bottles & bandages.




                                                                                                                                                                                                                                                                                                                                                                                                                1
                                                                                                                                                                                                                                   IEM Findings                                                                                                                  Remediation                          [Status]
FLA Code/ Compliance issue                        Country Law/Legal Reference        FLA Benchmark                                          Non-compliance                    Risk of Non-compliance                                     Evidence of Non-              If not corroborated, Sources/Documentation Notable        PC Remediation plan               Target     Company Documentation Completed;
                                                                                                                                                                                                                                        compliance                     explain why          used for corroborating Features                                        Completion follow up             Pending;
                                                                                                                                                                                                                                        (uncorroborated)                                                           implemented                                     Date       (Cite date            On-going
                                                                                                                                                                                                                                                                                                                   by Factory                                                 of follow
                                                                                                                                                                                                                                                                                                                   Management                                                 up)
                                                                                                                                                                                                                                                                                                                   or Company
PPE                                                                                  Workers shall wear appropriate protective              Although facility provides all                                                                                                                  Facility walkthrough                 Will train workers on the use
                                                                                     equipment (such as gloves, eye protection,             the PPE required for a safe                                                                                                                                                          and benefits of using PPE as
                                                                                     hearing protection, respiratory protection, etc.)      working environment, two                                                                                                                                                             well as set up disciplinary
                                                                                     to prevent unsafe exposure (such as                    employees refused to wear it.                                                                                                                                                        measures to ensure workers
                                                                                     inhalation or contact with solvent vapors,                                                                                                                                                                                                  use them.
                                                                                     noise, dust, etc.) to hazardous elements
                                                                                     including medical waste.
Chemical Management                                                                  All chemicals and hazardous substances                 Chemical storage is located                                                                                                                         Facility walkthrough             Will look for other product       28-Feb-07
                                                                                     should be properly labeled and stored in               inside the work area (Stain                                                                                                                                                          options (stain removers) that
                                                                                     accordance with applicable laws. Workers               removing area)                                                                                                                                                                       can be safely used inside the
                                                                                     should receive training, appropriate to their job                                                                                                                                                                                           work area and will properly
                                                                                     responsibilities, in the safe use of chemicals                                                                                                                                                                                              store.
                                                                                     and other hazardous substances

Ventilation/Electrical/facility maintenance                                          All ventilation, plumbing, electrical, and lighting    Employees interviewed                                                                                                                               Facility walkthrough and         Our 7 air conditioning units are Completed
                                                                                     services shall be provided and maintained to           mentioned that the work area                                                                                                                        worker interviews.               now working. Going forward we
                                                                                     conform to applicable laws and prevent                 was very hot. Although not                                                                                                                                                           will constantly monitor to ensure
                                                                                     hazardous conditions to employees in the               measured, auditor confirms                                                                                                                                                           the temperature is kept at a
                                                                                     facility                                               the temperature was high.                                                                                                                                                            comfortable level.


Sanitation in Facilities                                                             All facilities including factory buildings, toilets,   1- In 60% of restrooms the                                                                                                                          Facility walkthrough             1- Bathrooms' toilets have been Ongoing
                                                                                     canteens, kitchens, and clinics, shall be kept         toilet flush system is not                                                                                                                          Employee interviews              repaired. Will monitor on a
                                                                                     clean and safe and be in compliance with               operable. No toilet paper                                                                                                                           and visual observation.          constant basis. 2- Will fumigate
                                                                                     applicable laws                                        observed during visit. 2-                                                                                                                                                            on a monthly basis.
                                                                                                                                            Interviewees complained
                                                                                                                                            about rodent infestation in the
                                                                                                                                            locker room. Monitors
                                                                                                                                            observed that lockers are
                                                                                                                                            located next to a drain system
                                                                                                                                            which is not completely sealed
                                                                                                                                            and could possibly be the
                                                                                                                                            source of rodents.

Evacuation Procedure                                                                 All applicable legally required or recommended         Plant 1 (Production) has 7                                                                                                                          Facility walkthrough             Will ensure all exits remain      Completed
                                                                                     elements of safe evacuation (such as posting           exits. Two of them were                                                                                                                                                              unlocked during work hours.
                                                                                     of evacuation plans, unblocked aisles/exits,           found locked during working
                                                                                     employee education, evacuation procedures,             hours (2:05PM).
                                                                                     etc.) shall be complied with and workers shall
                                                                                     be trained in proper safety, first aid, and
                                                                                     evacuation procedures

Machinery Maintenance                                                                All production machinery and equipment shall At least 20% of the sewing                                                                                                                                    Facility walkthrough             Will do our own inpections and    31-Mar-07
                                                                                     be maintained, properly guarded, and         machines inspected were                                                                                                                                                                        repair those machines with
                                                                                     operated in a safe manner.                   missing lower pulley guards.                                                                                                                                                                   missing pulley gurards.
Other                                                                                                                                       At least 40% of the chairs                                                                                                                          Facility walkthrough             We will do it on a monthly basis. 30-Jun-07
                                                                                                                                            used by employees do not                                                                                                                                                             Our plan is to have all corrected
                                                                                                                                            have back support and                                                                                                                                                                by end of June 2007.
                                                                                                                                            standing workers do not have
                                                                                                                                            rubber mats.

7. Freedom of Association and Collective Bargaining
Employers will recognize and respect the right of employees to freedom of association and collective bargaining
Other                                                                                                                                                                         Although the facility is unionized, There is no written                                                           Review of company                We currently have a written       31-Jan-07
                                                                                                                                                                              policy on Freedom of Association and Collective                                                                   policies and HR                  policy on Freedom of
                                                                                                                                                                              Bargaining.                                                                                                       manager interview.               Association and Collective
                                                                                                                                                                                                                                                                                                                                 Bargaining Agreement and will
                                                                                                                                                                                                                                                                                                                                 post by end of January.




Compliance to local collective bargaining laws    Honduras Labor Code: Art.60        Employers will comply with all national and            Review of payroll records for                                                                                                                       Review of payroll                Factory will begin using only one 31-Mar-07
                                                  & 66: A Collective Bargaining      local laws and regulations concerning                  periods covering the 13th and                                                                                                                       ledgers for the 13th and         payroll record, which will include
                                                  Agreement requires all             collective bargaining and free association.            14th month payments ******                                                                                                                          14th month payment.              all wages including overtime, as
                                                  signatories and those they         Where conflicts are known to exist, employers          shows that payments are                                                                                                                             Employee interview and           per CBA and Honduran law.
                                                  represent to abide by its          will use the standard that provides the                averaged using the regular                                                                                                                          review of Collective
                                                  provisions.           Collective   greatest protection for workers.                       wages and do not include the                                                                                                                        Bargaining Agreement.
                                                  Bargaining Agreement, Clause                                                              overtime as mandated by the
                                                  #22: Facility will pay the 13th                                                           Collective Bargaining
                                                  and 14th Aguinaldo using the                                                              Agreement.
                                                  average earned combining both
                                                  the regular and overtime
                                                  earnings.

Employer interference/intimidation                                                   The employer will not interfere with workers’                                                                                                      Minutes of an incident         Monitors reviewed        Review of minutes.
                                                                                     exercise of the right to freedom of association                                                                                                    that occurred on August        a claim presented        Interview with union
                                                                                     through intimidation, including illegal or                                                                                                         2006 state that a security     to the ministry of       delegates and
                                                                                     unreasonable searches                                                                                                                              guard attempted to             labor by the             management
                                                                                                                                                                                                                                        assault an employee            unions. Personne
                                                                                                                                                                                                                                        affiliated to the union with   file of the security
                                                                                                                                                                                                                                        a knife-like object. He        guard in question
                                                                                                                                                                                                                                        was restrained by other        did not show any
                                                                                                                                                                                                                                        security guards and            type of reprimand,
                                                                                                                                                                                                                                        further threatened to kill     but showed that
                                                                                                                                                                                                                                        the employee. Witness          employee was let
                                                                                                                                                                                                                                        statements are recorded        go. Monitors could
                                                                                                                                                                                                                                        on the minutes. The            not verify if security
                                                                                                                                                                                                                                        Union delegate claims          guard has been
                                                                                                                                                                                                                                        that security guard in         rehired at the other
                                                                                                                                                                                                                                        question was fired from        facility belonging to
                                                                                                                                                                                                                                        [factory] but soon after       [factory].
                                                                                                                                                                                                                                        was rehired at the sister
                                                                                                                                                                                                                                        company of factory,
                                                                                                                                                                                                                                        [factory x], located in
                                                                                                                                                                                                                                        Honduras.




                                                                                                                                                                                                                                                                                                                                                                                                                 2
                                                                                                                                                                                                       IEM Findings                                                                                                             Remediation                          [Status]
FLA Code/ Compliance issue                       Country Law/Legal Reference         FLA Benchmark                                        Non-compliance                      Risk of Non-compliance         Evidence of Non-         If not corroborated, Sources/Documentation Notable        PC Remediation plan               Target     Company Documentation Completed;
                                                                                                                                                                                                            compliance                explain why          used for corroborating Features                                        Completion follow up             Pending;
                                                                                                                                                                                                            (uncorroborated)                                                      implemented                                     Date       (Cite date            On-going
                                                                                                                                                                                                                                                                                  by Factory                                                 of follow
                                                                                                                                                                                                                                                                                  Management                                                 up)
                                                                                                                                                                                                                                                                                  or Company
Union Harassment                                  Honduras Labor Code: Art.60        The employer will not dismiss, discipline, or                                                                          On at least two occasion, Monitors observed Review of minutes of
                                                 & 66: A Collective Bargaining       otherwise coerce or threaten workers because                                                                           Union delegates have      numerous claims      incidents that have
                                                 Agreement requires all              of their exercise of the right to freedom of                                                                           raised complaints to the  presented by union occurred at the facility
                                                 signatories and those they          association. When union officers are                                                                                   Department of Labor of    but neither Facility during the last 6
                                                 represent to abide by its           dismissed, demoted or otherwise suffer a loss                                                                          abusive behavior against nor unions could      months.
                                                 provisions.            Collective   of rights at work, a monitor should look with                                                                          them by facility          present monitors
                                                 Bargaining Agreement, Clause        special attention at the possibility of anti-union                                                                     management. Union         with any response
                                                 #56: Facility and Union commit      discrimination                                                                                                         delegates claim that the  from the ministry
                                                 to respect each other, avoiding                                                                                                                            Department of Labor has other than the
                                                 insulting, instigations and                                                                                                                                failed to follow-up their minutes taken.
                                                 offensive behavior.                                                                                                                                        complaints or issue
                                                                                                                                                                                                            resolutions regarding
                                                                                                                                                                                                            them because the facility
                                                                                                                                                                                                            has influence on
                                                                                                                                                                                                            government decisions.


Compliance to local collective bargaining laws    Honduras Labor Code: Art.60                                                                                                                               Facility management              Insufficient time to   Review of document
                                                 & 66: A Collective Bargaining                                                                                                                              presented union delegates        review financial or    presented by facility to
                                                 Agreement requires all                                                                                                                                     with a letter stating they       production             union delegates.
                                                 signatories and those they                                                                                                                                 find themselves in serious       problems incurred      Interview of union
                                                 represent to abide by its                                                                                                                                  financial condition and          by facility. This      delegate.
                                                 provisions.                                                                                                                                                that the status of the firm      information was
                                                 Collective Bargaining                                                                                                                                      is unknown. They                 provided to monitor
                                                 Agreement, Clause #44: The                                                                                                                                 explained that because of        team on Sunday,
                                                 duration of this collective                                                                                                                                this situation, facility could   October 15th, 2006
                                                 bargaining agreements is two                                                                                                                               not negotiate the new
                                                 years from the signing of the                                                                                                                              Collective Bargaining
                                                 agreement. (September 9th                                                                                                                                  Agreement which was
                                                 2004)                                                                                                                                                      due on September 2006.


Compliance to local collective bargaining laws    Honduras Labor Code: Art.60                                                             Union delegate interviewed                                                                                                Union notification to       PC currently provide                31-Dec-06
                                                 & 66: A Collective Bargaining                                                            alleged that facility was in                                                                                              facility and interviews     transportation or reimburement
                                                 Agreement requires all                                                                   violation of the collective                                                                                                                           to all workers. For some we
                                                 signatories and those they                                                               bargaining agreement                                                                                                                                  provide buses, and for others
                                                 represent to abide by its                                                                regarding this point; 4                                                                                                                               we give money to cover
                                                 provisions.                                                                              employees interviewed                                                                                                                                 transportation costs. Will
                                                 Collective Bargaining                                                                    claimed that transportation                                                                                                                           establish a written policy and
                                                 Agreement, Clause #23: The                                                               expenses have not been                                                                                                                                make sure all workers
                                                 facility commits to provide                                                              reimbursed by facility.                                                                                                                               understand this policy so that
                                                 transportation to all employees,                                                                                                                                                                                                               this situation is corrected by
                                                 from and to work.                                                                                                                                                                                                                              December 2006.

8. Wages and Benefits
Employers recognize that wages are essential to meeting employees’ basic needs. Employers will pay employees, as a base, at
least the minimum wage required by local law or the prevailing industry wage, whichever is higher, and will provide legally
mandated benefits
Payroll Reporting                                                                   Accurate and reliable payroll reporting,              Although facility policy and                                                                                              Management and              Effective December 15, 2006,     Completed
                                                                                    including pay stubs will be provided                  procedures request all                                                                                                    employee interviews.        the factory has discontinued the
                                                                                                                                          employees to log their hours                                                                                              Additional payroll and      practice of overnights shifts,
                                                                                                                                          of work, any work performed                                                                                               time card ledger review.    Sunday work, exceeding 12
                                                                                                                                          on Saturdays, Sundays and                                                                                                                             hours of work per day
                                                                                                                                          overnight work is not recorded                                                                                                                        (according to Honduran law),
                                                                                                                                          in the payroll system and                                                                                                                             and discontinued the practice of
                                                                                                                                          compensation is paid off the                                                                                                                          allowing workers to exceed 60
                                                                                                                                          books. During the last 12                                                                                                                             hours of work per week. Any
                                                                                                                                          months, approximately 7                                                                                                                               and all hours worked, are
                                                                                                                                          Sundays were worked (last                                                                                                                             recorded on the payroll system
                                                                                                                                          one on Sept 9th 2006), 30                                                                                                                             and paid accordingly.
                                                                                                                                          Saturdays were worked (Last
                                                                                                                                          one on Sept 30th 2006), 15
                                                                                                                                          overnight shifts were worked
                                                                                                                                          (Last one on June 23rd 2006).
                                                                                                                                          Overnight work is any work
                                                                                                                                          performed between 8:30PM to
                                                                                                                                          4 or 5AM.

False Payroll Records                                                                Employers will not use hidden or multiple            Facility uses time records to                                                                                             Payroll ledger review.      Factory will begin using only one 31-Mar-07
                                                                                     payroll records in order to hide overtime, to        calculate payroll, but overtime                                                                                           Employee and                payroll record. All overtime
                                                                                     falsely demonstrate hourly wages, or for any         work conducted on Saturdays,                                                                                              management                  work, regardless of the days
                                                                                     other fraudulent reason.                             Sundays and overnight work                                                                                                interviews.                 worked on, will be recorded on
                                                                                                                                          is paid in cash and not                                                                                                                               that one payroll record.
                                                                                                                                          recorded on payroll ledgers.
                                                                                                                                          Additionally, the non-recorded
                                                                                                                                          hours exceed legal regulations
                                                                                                                                          of overtime and the FLA
                                                                                                                                          Code.

Legal benefits                                   Art. 346 (Vacation): Periods of Employers will provide all legally mandated              Facility maintains a policy of                                                                                            Payroll ledger review.      Some employees with senority        31-Jan-07
                                                 vacation entitlement; after 1 year benefits to all eligible workers                      collective vacation during                                                                                                Employee and                decided to take the additional
                                                 of service (10) days, after 2                                                            Christmas. During December                                                                                                management                  vacation days and some
                                                 years of service (12) days, after                                                        2005, facility allowed 11 days                                                                                            interviews.                 decided to receive payment
                                                 3 years of service (15) days,                                                            off for vacation. As a result of                                                                                                                      instead. Effective Jan 31st.,
                                                 after 4 years of service (20)                                                            this practice, employees who                                                                                                                          2007, workers who decide not
                                                 continuous labor days.                                                                   are entitled to more than 11                                                                                                                          to take the additional vacation
                                                 Art. 348; It is forbidden to                                                             days (due to employment                                                                                                                               days will have to request it in a
                                                 compensate vacation with                                                                 seniority) are not granted the                                                                                                                        written form.
                                                 monetary payments, special                                                               additional days. (The non-
                                                 circumstances may be permitted                                                           taken days are properly
                                                 by the ministry of labor.                                                                compensated).

Legal Compliance for holiday/leave               Art 339 (Holidays): Holidays  Workers will be paid for holidays and leave as             Facility's present practice is to                                                                                         Employee /                  Will maintain only one set of       31-Mar-07
                                                 must be compensated computing required by law                                            compute the holiday based on                                                                                              management                  payroll records and all benefits
                                                 the average of regular plus                                                              the regular wage of the prior                                                                                             interviews. Review of       and fringe payments will be
                                                 overtime earned during the                                                               week and not the average of                                                                                               payroll ledgers             calculated based on those
                                                 immediate preceding week.                                                                regular and overtime as                                                                                                                               accurate records.
                                                                                                                                          mandated by law. As work
                                                                                                                                          on Saturday and or Sunday is
                                                                                                                                          not entered into the payroll
                                                                                                                                          register, the average is not
                                                                                                                                          based on all hours worked.

                                                                                                                                                                                                                                                                                                                                                                                3
                                                                                                                                                                                                                             IEM Findings                                                                                                                  Remediation                          [Status]
FLA Code/ Compliance issue                          Country Law/Legal Reference          FLA Benchmark                                      Non-compliance                  Risk of Non-compliance                                 Evidence of Non-                 If not corroborated, Sources/Documentation Notable        PC Remediation plan            Target     Company Documentation Completed;
                                                                                                                                                                                                                                  compliance                        explain why          used for corroborating Features                                     Completion follow up             Pending;
                                                                                                                                                                                                                                  (uncorroborated)                                                              implemented                                  Date       (Cite date            On-going
                                                                                                                                                                                                                                                                                                                by Factory                                              of follow
                                                                                                                                                                                                                                                                                                                Management                                              up)
                                                                                                                                                                                                                                                                                                                or Company
Legal benefits                                      Art. 340: If a holiday is worked,                                                       When facility operates on a                                                                                                                  Employee /                           This practice has been          Completed
                                                    the payment must be at 200%                                                             day of rest, employees do not                                                                                                                management                           discontinued. Last Sunday
                                                    over the regular rate and must                                                          receive an additional day off                                                                                                                interviews. Review of                worked was in the month of
                                                    receive an additional day off.                                                          as required by legal                                                                                                                         payroll ledgers                      October.
                                                                                                                                            regulations.


Unpaid Apprentice Work Other                        Art. 176, d. (Apprentice work)                                                                                                                                                   Auditors found three           Facility claimed      Employee /
                                                    The remuneration of the                                                                                                                                                          employees working at the       that this is          management
                                                    apprentice must be stated in the                                                                                                                                                 facility who did not receive   permitted by the      interviews.
                                                    contract signed by said                                                                                                                                                          any compensation for           Ministry of
                                                    apprentice and the employer.                                                                                                                                                     their work.                    Education as part
                                                    (….)                                                                                                                                                                                                            of an educational
                                                                                                                                                                                                                                                                    program. This was
                                                                                                                                                                                                                                                                    supposed to be
                                                                                                                                                                                                                                                                    presented to the
                                                                                                                                                                                                                                                                    auditors on Oct
                                                                                                                                                                                                                                                                    18th. Facility failed
                                                                                                                                                                                                                                                                    to provide any
                                                                                                                                                                                                                                                                    evidence of such
                                                                                                                                                                                                                                                                    permit.

9. Hours of Work
Except in extraordinary business circumstances, employees will (i) not be required to work more than the lesser of (a) 48 hours per
week and 12 hours overtime or (b) the limits on regular and overtime hours allowed by the law of the country of manufacture or,
where the laws of such country will not limit the hours of work, the regular work week in such country plus 12 hours overtime; and
(ii) be entitled to at least one day off in every seven day period
Overtime Limitations                                Art 333 (Overtime): Overtime is      Except in extraordinary business                   During high season (9 months                                                                                                                Employee interviews,                  To be reviewed immediately and 31-May-07
                                                    regulated under the following        circumstances, employees will (i) not be           during a year), employees                                                                                                                   review of time ledgers                steps implemented to ensure
                                                    conditions: same employee can        required to work more than the lesser of (a) 48    work continuous overtime,                                                                                                                   and employer                          overtime work does not exceed
                                                    not work over time more than 4       hours per week and 12 hours overtime or (b)        some exceeding the 4 times                                                                                                                  interviews.                           legal limits during high season.
                                                    times during the same work           the limits on regular and overtime hours           per week and the 12 hours
                                                    week. Art 338 (Day off):             allowed by the law of the country of               per week permitted by law.
                                                    Employees are entitled to a day      manufacture or, where the laws of such             As per management, during
                                                    off during a work week,              country will not limit the hours of work, the      the last 12 months, 7
                                                    preferable on a Sunday               regular work week in such country plus 12          Sundays have been worked,
                                                                                         hours overtime; and (ii) be entitled to at least   the last time was on Sept 9th
                                                                                         one day off in every seven day period. An          2006, when 62 workers
                                                                                         extraordinary business circumstance is a           volunteered to work on
                                                                                         temporary period of extra work that could not      Sunday.
                                                                                         have been anticipated or alleviated by other
                                                                                         reasonable efforts

Voluntary OT                                                                             Overtime hours worked in excess of code                                            Labor contract contains a clause in section VI that                                                         Review of labor contract              Will ensure all work contracts    31-Jan-07
                                                                                         standard will be voluntary                                                         says "If the employer solicits the worker, said worker                                                                                            reflect language that overtime is
                                                                                                                                                                            is obligated to work additional hours over the regular                                                                                            voluntary.
                                                                                                                                                                            shift" The term obligated contradicts the voluntary
                                                                                                                                                                            nature of overtime work and the freedom of the
                                                                                                                                                                            workers to refuse overtime work.

10. Overtime Compensation
In addition to their compensation for regular hours of work, employees will be compensated for overtime hours at such premium
rate as is legally required in the country of manufacture or, in those countries where such laws will not exist, at a rate at least equal
to their regular hourly compensation rate.
Miscellaneous




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