Abstract
Enforcing conduct between employers and employees is necessary when it comes to minimizing the likelihood of economic inefficiency for organizations. The US has established labor laws at federal and state levels to ensure that employers adhere to the minimum wage regulations. Besides ensuring that employers remunerate workers appropriately for overtime, the laws guarantee humane working conditions and reimbursement of various work-related benefits. This paper suggests that a discussion of the necessity of such laws is best achieved upon consideration of instances in which the laws have been claimed to be violated or not included in organizational operational policy. It discusses such necessity in the context of Addidas, Nike, Gap, Inc., and Target.
Introduction
Different nations establish labor laws to ensure that organizations do not exploit employees in the quest to make optimal profits. Such laws, including laws enforced by the International Labor Organization (ILO), seek to eliminate child labor while at the same time ensuring that workers earn wages that are adequate to sustain their livelihood. The laws also ensure that working conditions are appropriate for people. They should not affect their health. This paper expounds on the necessity of labor laws by discussing examples of organizations in which such laws have been claimed to be violated.
Literature Review
Labor laws govern the employee-employer relationships. They address the standards of conduct between employers and the employed. They exist because frictionless economic efficiency can often operate to the disadvantage of the employed people to the point of violating their basic civil rights. Labor laws are important since they ensure that employees do not work under terms that lead to unfair practices such as poor wages and/or working for excessive hours among other issues, including child labor (Befort & Budd, 2009). However, Powell (2012) asserts that even though employees at state and federal levels have higher protection, contract workers do not have sufficient protection.
Nike Company’s accusation concerning its violation of labor laws in contract manufacturing firms exemplifies why labor laws exist, even though nations, where such firms are located, do not have sufficient mechanisms for protecting employees in thresholds that match those of the US. In America, the Fair Labor Standards Act (FLSA) provides regulations on minimum wage and overtime (Befort & Budd, 2009). The goal is to ensure that any employee’s input in an organization is remunerated accordingly. However, such inputs should only be made under fair working conditions (Edmonds & Pavcnik, 2005). Nevertheless, this claim does not imply that US-based organizations do not experience challenges in protecting their employees.
Criticisms concerning violations of labor laws that govern the operation of manufacturing organizations in the US have been raised in contract factories for companies such as Nike and Addidas. Among the major concerns in these organizations are low wages and poor conditions of working in Asian-based production plants. Bad working conditions pose major threats to employees’ safety or occupational health. Many organizations that seek to remain successful in the long term through the strategic initiative of focusing on the employees as their most important resource for gaining competitive advantage minimize occupational hazards and any chances of labor loss (Pfeiffer & Gellar, 2003). However, this situation is not always the case.
Policies that illegalize the importation of goods made with child labor are attributed to the need for preventing children from being exposed to dehumanizing conditions in exchange for low incomes (Carroll & Buchholtz, 2012). Brown (2002) reckons that children have been historically worked. However, he asserts that “the fact of children working and the difficult conditions under which children work occasionally become more evident… because of the increasing number of children who are producing goods for export” (Brown, 2002, p.3). From this perspective, why do companies such as Nike claim that they have shunned from employing children in Pakistan, Bangladesh, and Cambodia among other nations, yet they are accused of employing children in violation of labor laws?
Several events have been recorded in the recent past revealing the accusations of organizations that uphold policies, which violate workers’ rights. For instance, Nike has been accused of several years that it employs children in its Cambodia-based plants. However, the organization argues that it is possible to purchase fake age evidence for only $5 (Boggan, 2001). While the stalemate of the company’s accusations for employing children remains unresolved, Boggan (2001) observes immense concerns that the company uses a minimal portion of the cost of production of its pair of shoes (70 pounds) in the payment of labor.
Nike was put under pressure to ensure that workers within its Asian production plants were remunerated accordingly. However, the company claimed that the allegations of its violation of employee rights were human resource issues, but not necessarily issues of human rights violation (Boggan, 2001). Measures to provide good working conditions at Nike plants in Asian countries face challenges that emanate from managers and employees. For instance, Boggan (2001) asserts that managers bribe auditors for them to report on lesser working hours and higher pay rates. Surprisingly, workers, particularly immigrants, are normally willing to work longer hours to maximize their savings at the expense of their family life.
Nike is not the only organization caught in the stalemate of violating labor laws. The Gap, Inc. and Target, Inc. have experienced lawsuits filed against practices of a sweatshop in their factories in Saipan. In the cases, Does v. The Gap, Inc., Unite v. The Gap, and Does V. Advanced Textile Corp, a district judge granted the claims of the workers against abuse of their labor right in Saipan in 2002.
Geiger (2004) asserts, “the plaintiffs, suing anonymously, named popular clothing companies, including The Gap, J. Crew, Tommy Hilfiger, and Target, as defendants and alleged labor violations, including indentured servitude, peonage, and numerous acts of racketeering activity” (p.46). Upon granting the case, the judge ordered the defendants to pay $20 million. The exemption of Saipan from laws on minimum wage together with immigration laws made the Island attractive for garment industries to establish sweatshops.
Addidas is a big brand that represents sportspeople’s status. However, despite its recognition and brand equity, the company faced a mega controversy in 2000 relating to employee mistreatment in the Indonesian factories, which supplied conglomerates to Germany (Burke, 2000; Swaen, 2008).
The European parliament heard that the company made clothes that had child labor inputs. In some instances, these children were not only forced to work overtime without extra pay but also sexually harassed. Besides, they were punished for failing to work overtime. The wages were much below the par value set by the international labor organization’s wage levels that are necessary to make workers live a decent life (The International Labor Office, 2002). Even though the wages could have complied with the ILO standards, employing underage people still entailed a violation of labor laws.
Research Results
Labor laws are established to ensure that employees do not suffer at the expense of achieving organizational economic efficiencies driven by low-cost motives. However, difficulties in complying with the laws due to inadequate legislation in some nations require the ILO to intervene to regulate the conduct of corporations. However, even where organizations have the goodwill for enforcing policies for protecting employee rights, profit maximization motives, especially where contract manufacturers are involved in foreign low-cost economies, make the policies incredibly hard to implement. This situation can be seen in the case of Addidas’ experience with Cambodia manufacturing plants. Therefore, statutory legal enforcement of labor laws is the only strategy that can guarantee the protection of employee rights.
Recommendations
This research defended its claims and arguments based on secondary materials. It discussed the necessity of labor laws from the context of cases in which such laws have been violated, especially in foreign operations for organizations in which contract firms are used. Therefore, it is necessary to conduct further research on how examples of companies such as Nike adhered to labor laws in domestic operations, including whether claims of violations occurred. Such research would probably use quantitative data or combine it with qualitative data to get reliable information.
Conclusion
In the US, companies comply with labor laws. However, in foreign nations, companies such as Addidas and Nike face difficulties in implementing such laws due to inadequate legislation on labor laws. Nevertheless, even where the ILO has a set of rules regulating employment relationships, especially on child labor, instances have been witnessed where such laws are not strictly upheld.
Reference List
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