UTZ GUIDANCE DOCUMENT
LIVING WAGE (Version 1.0 | August 2016)
Guidance for implementation of the living wage requirements in the UTZ Core Code of Conduct for individual and multi-site
certification (versions 1.1 & 1.0).
This guidance document is part of a set of documents designed to assist with
implementation of specific topics within the UTZ core Code of Conduct.
This document is intended for use by farm managers and technical assistants.
2 - © UTZ Version 1.0 - August 2016
UTZ AND THE LIVING WAGE
A living wage is the remuneration received for a standard
work week by a worker in a particular place sufficient to
afford a decent Standard of living for the worker and her or
his family. Elements of a decent standard of living include
food, water, housing, education, health care, transport,
clothing, and other essential needs including provision for
WHAT IS DECENT
Decent housing is one of the
main elements of a decent living.
Therefore, both the value and
quality of housing has to be taken
into account when assessing total
remuneration. In the UTZ program,
all workers living on site should
be provided with clean and safe
The UTZ definition of decent
housing (I.C.107) includes:
• Adequate hygiene and
sanitation including safe
drinking water, toilets, clean
cooking and eating areas and
• Protection against weather
conditions such as cold, damp,
heat, rain and wind
• Safe storage of personal items
including living quarters that
can be locked
• Access to electricity where
• Separate quarters for families
or for men and women where
accommodation is provided
for individual workers
The UTZ Core Code of Conduct for individual and multi-site certification
includes criteria on the living wage (I.C.83). It requires that employers take
steps to improve worker wages in line with local living wage levels. This
• Comparing worker remuneration, including cash and in-kind wages,
with living wage estimates provided by UTZ in the List of Living Wage
Benchmarks (See Annex 3).
• Where wages are below living wage, steps should be taken to increase
wages towards living wage levels over time.
• If no process for wage bargaining exists, one should be introduced and a
wage improvement plan developed with yearly milestones.
The aim of this document is to
• explain the UTZ approach to the living wage
• help you to assess wage levels against legal and living wage levels
• take action to improve wages towards living wage levels
This guidance applies to versions 1.1 and 1.0. Version 1.1 is an improved version
of version 1.0. As of the 1st of July 2015, groups can be audited against the
Core Code of Conduct version 1.0 or 1.1. As of the 1st of January 2016, groups
can only be audited against the Core Code of Conduct version 1.1
BOX 2: what does the Code say (version 1.1)
Guidance to the UTZ Core Code of Conduct (for groups and multi-group certification, versions 1.1 & 1.0) - 3
Why does UTZ require action on the living wage?
Agricultural workers are among the lowest paid workers, with average wages
lower than those in urban areasi. Ninety percent of countries have set a legal
minimum wage but many workers still get paid less than this . In many cases
minimum wages are set too low and do not provide a decent standard of
living for workers and their families. UTZ aims to encourage improvements in
worker wages towards a living wage for all agricultural workers.
To improve workers’ wages, UTZ is also working with five other sustainability
standards and the ISEAL Alliance to develop a common approach to
measuring and implementing the living wageii.
BOX 3: LIVING WAGE CALCULATIONS
To help producers improve worker wages, UTZ is providing guidance
on what a living wage should be in each region. To develop these
calculations, we are using an established method known as the Anker
methodology, also used by organisations such as Fair Trade International,
Rainforest Alliance, Sustainable Agriculture Network, Social Accountability
International, GoodWeave and Forest Stewardship Council.
The living wage is calculated based on the estimated cost of living in a
particular place. The methodology requires detailed documentation and
analysis to ensure that the estimate is solid and credible. The price of a
low cost nutritious diet is taken into account as well as basic but decent
housing costs, and education, health care and transport costs to make
sure that workers are paid enough to afford these.
Setting the living wage levels involves consultation and participation of
local stakeholders including trade unions and employer organizations. The
goal is to obtain a credible living wage estimate that stakeholders view as
The evaluation of wage levels by certification bodies must take into
account not only gross cash payments but also deductions from pay,
overtime pay, bonuses, and in-kind benefits.
A global database of living wage estimates, is being developed by UTZ.
Newly calculated estimates will be introduced over time. All countries
where UTZ operates will be covered. The current list of LW estimates can be
found in Annex 3.
i ILO 2008 report, Rural Employment for Poverty Reduction
ii For more information: https://utzcertified.org/images/stories/site/pdf/
4 - © UTZ Version 1.0 - August 2016
WHAT TO HAVE IN PLACE?
Establish a system for measuring and improving wages.
To assess if you meet the Living Wage requirements set by UTZ, you could carry
out the following checks:
STEP 1: ASSESS WAGE LEVELS
Review current worker wages focusing on the lowest paid workers (including
Check if wages meet the legal minimum wage, the collective bargaining
agreement, and the living wage estimate in the List of Living Wage estimate.
a) Legal minimum wage:
Cash wages paid to all workers must be equal to or exceed the minimum
wage set by governments. For workers paid per piece, estimate how much a
laborer can produce in one day (e.g. kg harvested or hectares sprayed), then
calculate the average wage per day and/or per month.
b) Collective Bargaining Agreement (CBA)
If an official CBA is in place, make sure that all terms of the agreement are
respected including those relating to wage levels and the frequency and
quality of in-kind benefits. An official CBA is different from a sector wage
agreement and must be recognized by the trade unions/ syndicate involved
in reaching the agreement.
c) Living Wage estimate
Check whether worker wages meet living wage estimates, where such
estimates are availableiii. Your assessment includes both cash and in-kind
• Cash payments. For workers paid per piece, estimate the average daily
labor productivity (e.g. kg harvested or hectares sprayed), then calculate
the average wage per day and/or per month.
Cash wages on all UTZ certified
farms should be increased each
year to reflect the national rate
of inflation. This ensures that real
wage levels are maintained*.
* To find the yearly inflation rate in your
country , you can for example refer to
the following world bank webpage:
iii The setting up of a global Living wage database is on-going. For some
countries the living wage estimate is not yet completed. In such cases, the
monitoring of wage levels remains mandatory but not the assessment against
the estimate. New estimates are introduced to the UTZ Code of Conduct and
older ones are updated on a regular basis. Please check the UTZ website
(www.utz.org) to see if an estimate for your country has been introduced.
Guidance to the UTZ Core Code of Conduct (for groups and multi-group certification, versions 1.1 & 1.0) - 5
• In-kind benefits. This should include any in-kind benefits the farm provides
to workers that assist them in meeting their basic needs (e.g. food, housing,
health care and education for children). See Annex 1.
STEP 2: DETERMINE WHETHER A WAGE IMPROVEMENT
PLAN IS NECESSARY
If workers’ total remuneration is below the living wage estimate and there
are limited or no official processes for wage negotiation in place, a wage
improvement plan should be set up. The agreement should cover ALL
WORKERS including non-union members and temporary workers. If some
workers are not covered by the CBA then a wage improvement plan will be
If workers’ total remuneration is below the living wage estimate but there
is a process in place for wage negotiation based on credible worker
representation, for example a collective bargaining agreement, this may be
sufficient to comply with the UTZ criteria. An additional improvement plan may
not be needed, see below.
STEP 3- SET UP A WAGE IMPROVEMENT PLAN
A wage improvement plan should:
• be agreed upon based on consultation between workers (or their official
representatives) and management.
• Include measurable yearly increases in cash wages and/or improvements
in the quality or quantity of in-kind benefits provided.
IN PRACTICE: ASSESSING AND
ADDRESSING WAGE LEVELS
WHICH WORKERS’ WAGES SHOULD BE ASSESSED?
Identify and assess wages for the lowest paid workers, usually unskilled
agricultural workers. Auditors may also require an assessment of w