Digitized payroll is making its way to garment factory workers, thanks to a new pilot program led by a trio of global fashion brands.
Levi Strauss & Co., Marks & Spencer and VF Corporation announced this week the launch of a digital payroll pilot program for factory workers in Egypt and Cambodia. The three companies collaborated with global nonprofit Business for Social Responsibility (BSR) and Mastercard to move from a traditional cash payroll to a digital system and provide training on the services.
Doing so will provide workers with a more secure, consistent cashflow and help them take control of their finances. Employers will be able to deposit wages directly into workers’ accounts, and from there, workers can activate debit cards, prepaid cards or digital wallets to pay bills or send money.
“Mastercard is an excellent partner for a pilot program like this, due to the infrastructure they have built around digital payment systems coupled with our longstanding commitment to the well-being of workers,” Michael Kobori, LS&Co.’s vice president of sustainability, said in a statement. “We look forward to seeing the outcomes of the pilot and hope this advances efforts to realize the potential of digital payments to benefit workers across apparel supply chains.”
Participating factories are also expected to benefit from a digital payroll. It will streamline the workflow for the teams currently in charge of dispersing wages and provide better transparency. As workers often have to take days off to travel miles to pay household bills under a cash-based system, factories will no longer need to devise a workaround for coverage.
As 68 percent of garment factory workers are female, this initiative will predominantly benefit women.
Employees will also receive digital training and financial planning advice from BSR’s HERfinance Digital Wages education program. HERfinance is one pillar of HERproject, a workplace-based women’s empowerment program in global supply chains, which has empowered more than one million workers with knowledge and skills on health, financial inclusion and gender equality since 2007.
“Digitizing wages is an area where companies can make relatively small investments and have huge positive impacts, especially for low-income women workers,” Christine Svarer, HERproject director, said. “But to realize these positive impacts, it is vital to ensure that workers have the skills and knowledge to benefit from the transition and that factories are supported during the process. We are delighted to be partnering with The Mastercard Center for Inclusive Growth and leveraging our experience in this space to make digital wages a success story.”