This month, GoodWeave is concluding the three-year project, “Child Labour Free Carpet – Deep Due Diligence for Dutch Companies”, which began in September 2022, funded by the Netherlands Enterprise Agency under the Fund against Child Labour (FBK) program.

The project, implemented in India and Nepal, aimed to expand GoodWeave’s approach to addressing child labor in carpet manufacturing supply chains while examining wage challenges faced by workers.

GoodWeave engaged with Dutch companies that source from these two countries, where some carpet-producing regions have a high concentration of child labor. As part of the project, we improved supply chain transparency, tracking production from factories all the way down to the most remote home-based work sites; identified cases of child labor and at-risk children; and built the capacity of brands, producers and local partners to address these cases through remediation and prevention programs.

A crucial part of this project focused on understanding the wages paid to workers across all GoodWeave supply chains. Between October and December 2024, GoodWeave piloted an innovative wage data collection tool developed with expert consultants and in collaboration with our country affiliates. The tool collected wage data from nearly 4,000 workers—3,466 in India and 500 in Nepal—during audits and inspections across all GoodWeave supply chains.

The tool was built to determine whether minimum wages were paid at all levels of the supply chain, covering all payment types, from daily-, weekly- and monthly-paid workers to piece-rate and unit-rate workers. Our tool was uniquely designed to convert different rates of pay into local legal minimum wage. For example, some workers might be paid per meter or square inch of a piece, while others, such as unit rate workers, are paid per unit of measurement. The variety of wages paid, which is common in the carpet industry, would benefit from this unique tool which is able to equalize different rates of pay. We also analyzed data collected during the pilot against existing, internationally recognized Living Wage benchmarks.

The pilot revealed significant findings. Lower tiers of the supply chain are less likely to receive minimum wage, and living wage is uncommon at all levels. These results align with our previous research but importantly provide clear data showing wage discrepancies across the supply chain in India and Nepal. The analysis highlights the considerable gaps that remain on both minimum and living wages, and we will continue working with importers, retailers, and suppliers to address these disparities.

The pilot revealed significant findings, most notably that lower tiers of the supply chain are less likely to receive minimum wage. In addition, Living Wage is not common at all tiers of the supply chain. These findings align with our previous wage-related research, but importantly they provide clear and accurate data to demonstrate the wage discrepancies for all wage types at all levels of the supply chain. Overall, the analysis shows that there is a lot of work to be done to close gaps on minimum and living wage discrepancies in the carpet supply chain in India and Nepal and we will continue working with importers, retailers and suppliers to address them.

Businesses can use this tool’s unique capabilities, tested and tried by GoodWeave through this pilot, to understand gaps in wages in their supply chain for all payment types and at all levels. We believe that understanding and aligning different rates of pay in the supply chain can bring companies closer to addressing wage discrepancies and advancing human rights due diligence in their corporate policies. GoodWeave will continue to use the learnings from this tool to inform policy and sourcing discussions on wages and encourage its licensed businesses to meet the momentum.

We assess wages in alignment with the GoodWeave Standard. While working Hours, Wages and Benefits component of the standard is a progress principle and not directly linked to certification, these findings are significant and all importers and producers should consider its relevant components, including:

• All wages, including overtime and benefits such as social security, sick leave, and maternity leave, must meet or exceed local minimum legal requirements.
• Where piece rate workers are employed, wage records show the calculation of rate per piece and that it is in compliance with minimum wage regulations.
• Where a living wage calculation is available, producers are expected to make efforts to pay that rate for the locality or industry.

The process of developing, implementing and analyzing data from this wage tool and pilot will inform future standard revisions at GoodWeave. While our project, “Child Labour Free Carpet – Deep Due Diligence for Dutch Companies,” is coming to a close, the findings show that the work is only just beginning, and we will continue working with importers, retailers and suppliers.