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JAAF highlights inaccuracy of Official Minimum Wage in reflecting true earnings of SL garment workers

May 16, Colombo (LNW): The Joint Apparel Association Forum (JAAF) has highlighted that the official minimum wage for garment workers does not accurately reflect their total earnings.

Responding to a recent article published on Just-Style, JAAF General Secretary Yohan Lawrence explained that the current two-tiered wage system includes a fixed basic wage supplemented by productivity-based payments and various non-cash benefits.

The Clean Clothes Campaign, an international alliance of labour unions and non-governmental organisations, has criticised Sri Lanka’s garment industry minimum wage, claiming it fails to meet workers’ family needs due to high inflation.

In March this year, the government increased the national living wage by 40 per cent, from Rs. 12,500 (US $42) to Rs. 17,500 (US $59) per month, along with a Rs. 3,500 budgetary relief allowance, bringing the total minimum monthly pay to Rs. 21,000 (US $70).

The apparel sector’s industry-agreed minimum wage, including the government allowance, stands at approximately Rs. 24,000 (US $80).

According to Lawrence, the article refers to the national minimum wage, which covers the fixed monthly component of employee earnings (the employee’s basic wage).

Whilst the national minimum wage was increased after a couple of years, companies will review the basic wage every year and, depending on their ability to pay, increase this basic wage annually, he clarified.

He pointed out that the article fails to mention the variable components of total earnings, which are paid in cash, or the non-cash benefits provided to employees.

Cash benefits include production bonuses, attendance allowances, annual bonuses, skill-based payments, and overtime.

The two-tiered system of a fixed basic wage, complemented by productivity-based payments, is standard in all manufacturing industries, both locally and globally, Lawrence emphasised.

In addition to cash payments, the industry provides non-cash benefits such as subsidised meals and transport.

Several companies also offer subsidised or free dry rations, a practice that began during the economic crisis and continues today, to help alleviate the cost of living for employees.

Lawrence argued that it is unfair to assess employees’ actual earnings based solely on the basic wage.

He also noted that inflation has decreased to single digits since early 2023, reducing its impact on real wages.

Despite these challenges, JAAF remains confident in achieving US $4.5 billion in apparel export earnings this year.

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