Deductions from Wages

Deductions from wages are only allowed to a limited extent. These include:

-  Income taxes

-  Contributions to the social security fund required by law

-  Deductions for extra services provided by the employer as long as their use is

   voluntary and at net cost price (e.g. employee accommodations)

-  Deductions for the redemption of loans and advances on wages

Payment of Wages

The auditor will check the following points with regard to the payment of wages:

-  If the laws in the respective country do not stipulate otherwise, wages are paid

   monthly and within 5 days of the end of the payment period.

-  Payment must be made in cash, by bank transfer or cheque. Payment in the form of

   produce or products is not permitted.

-  Payments must be documented for every employee.

-  The employees must receive a pay slip with the payment of their wages and this pay

   slip must offer comprehensive information on the composition of their wages including

   possible deductions in the local language.

Living Wage

In most countries the minimum wage stipulated by law does not provide employees with

enough income to cover his/her basic needs which are generally defined in terms of food,

housing, clothing, transport and access to services like education and health care. When

employees are not compensated adequately, they cannot afford a healthy diet and ensure

their wellbeing. Paying higher wages can lower labour turnover and increase productivity.

As food prices and living costs have continuously risen over the last years, the differential

between the legally required minimum wage and a living wage standard has increased in

most countries. A living wage earned within regular hours of work (without overtime

payments) should be enough to meet the employee’s and his/her family’s basic needs and

provide some discretionary income.

A living wage standard for some Asian countries like Bangladesh, China and India has been

calculated by the Asia Floor Wage Alliance which brings together organisation from these

Asian countries: www.asiafloorwage.org. Tchibo recognises the Asia Floor Wage as a

benchmark for living wages in the respective countries.