Minimum Wage 2013 for Bangladeshi Export Processing Zones

On 24 December 2013 Bangladesh Export Processing Zone Authority (BEPZA) announced the Minimum Wage 2013 for Garment Workers within Export Promotion Zones (EPZs) in Bangladesh. The increase came after an approval from the Prime Minister in the Letter no. 03.068.018.04.00.024.2010-727 dated: 23 December 2013, the minimum wages, other benefits and conditions of the service for the workers of the enterprises of EPZs.

An elaborated view of the Bangladesh EPZ Minimum Wage 2013, in effect since 1 December 2013:

EPZ Minimum Wage 2013

EPZ Minimum Wage 2013

Increase from 2010 into EPZ Minimum Wage 2013 can be illustrated as follows:

EPZ Garment Minimum Wage 2013

Bangladesh EPZ Garment Minimum Wage 2013 compared to 2010

Adjusted with inflation (FY 2011, 2012, 2013) the increase in minimum wage for EPZ factories is tabulated below (inflation rates collected from the Bangladesh Bureau of Statistics – BBS):

Minimum Wage 2013 in EPZ (column with adjusted sum of inflation for 3 FY)

Minimum Wage 2013 in EPZ (column with adjusted sum of inflation for 3 FY)

Earlier on November 2013 the Garment Minimum Wage 2013 [1] for factories outside the EPZ had been fixed amidst worker riots and controversies, that comes into effect from 1 December 2013, resulting in its first payment on early January 2014.

The new Export Processing Zone (EPZ) Minimum Wage is also deemed to be effective since 1 December 2013 and onwards, until further notice. Therefore, it becomes mandatory for wages to be paid in January 2014 not to be lower than this.

In addition to the gross minimum wage for the relevant positions, food allowance and transport allowance (if already paid for or provided by the garment factories inside the EPZ) will continue to remain the same as it has been previously.

Apart from the yearly increment of 10% on the Basic Wage for factories inside the EPZ against the 5% yearly increment on basic wage for non-EPZ factories, the EPZ Basic Wage 2013 also increased relatively strongly if compared with the increase of the same in non-EPZ Garment factories. However, it also must be brought into account that the comparison is not always equal due to the benefits that factories inside the EPZ enjoy compared to those outside. Moreover, factories outside the EPZ maintain a completely different employment structure than that maintained by the factories inside the EPZ, however, the difference is still visible,

Increase in Garment Basic Wage 2013 from Basic Wage 2010, compared between non-EPZ and EPZ factories

Increase in Garment Basic Wage 2013 from Basic Wage 2010, compared between non-EPZ and EPZ factories

Increase in Basic Wage has always been of utmost importance to every garment worker as their overtime payment solely depend on this pie of their gross wage; garment workers usually earn more than half of their living by doing overtimes due to the difference between their wage and a living wage[2] in Bangladesh.

The percentage increase from 2010 in EPZ Gross Minimum Wage 2013 and its Basic Wage (2013) is displayed below:

Rate of Increase in EPZ Gross Minimum Wage 2013 compared to increase in EPZ Basic Wage 2013

Rate of Increase in EPZ Gross Minimum Wage 2013 compared to increase in EPZ Basic Wage 2013

Although the increase in basic wage of EPZ factories did show a stronger rate compared to the non-EPZ factories, it also got slashed by 10% to weaken the basic wage pie which would directly impact the overtime pay of workers. The table below explains how the Basic Wage of EPZ garment factories increased in 2013 from what it was in 2010:

EPZ Basic Wage 2013 compared to EPZ Basic Wage 2010

EPZ Basic Wage 2013 compared to EPZ Basic Wage 2010

Currently, there are 425 enterprises inside the Bangladeshi EPZs and 73 are under construction, said Nazma Binte Alamgir, general manager for public relations at the Bangladesh Export Processing Zones Authority (BEPZA), a government-run organization under the Prime Minister’s Office [3].

There are eight EPZ located in Dhaka, Chittagong, Karnaphuli, Adamjee, Comilla, Mongla, Ishwardi and Uttara, employing around 382000 workers across the country, out of which an estimated number of 300000 workers belong to the garment factories [4]. There are almost 4.5 million garment workers in Bangladesh at the moment (mostly women), working in more than 5000 factories [5] across the country, and many more workers remain in factories which are still unregistered.

Garment factories inside the EPZ areas do not have any unionization. Moreover, EPZ factories are enjoying 10-year tax holiday and duty free machinery import facilities. Factories inside the EPZ get uninterrupted gas and power supply, which make them more competitive [6].

It remains to be seen how both the minimum wages fixed (and due to be paid on January 2014) get implemented across Bangladesh.

By Kasheful Hoda, Researcher and Activist, RISE.

————–

[1] https://risebd.com/2013/12/08/gazette-minimum-wage-2013/

[2] http://www.npr.org/blogs/money/2013/10/02/228195527/how-garment-workers-decided-104-72-a-month-was-a-living-wage

[3] http://www.thedailystar.net/new-pay-structure-for-epz-workers-approved-3987

[4] http://www.thefinancialexpress-bd.com/2013/12/26/10681

[5] http://www.thestar.com/news/world/2013/10/08/bangladesh_garment_factory_fire_kills_at_least_9_people.html

[6] http://www.dhakamirror.com/headlines/bgmea-demands-uniform-facilities-for-epz-non-epz-rmg-factories/

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Posted in Garment Worker Issues
2 comments on “Minimum Wage 2013 for Bangladeshi Export Processing Zones
  1. […] Recently, there have been many hostilities in some garment factories regarding wage, and a good number of factories continue such behavior of creating restlessness out of what should have been by now a “settled issue”. Earlier on 11 April this year, ATS Pearl Ltd, a garment factory employing around 1,700 workers in Chittagong Export Processing Zone, agitated for yearly increment on the factory premises, an issue already settled in the epz minimum wage 2013. […]

  2. […] Act 2006 (amendment 2013), and a fresh new (and controversial) minimum wage 2013 as well as an EPZ minimum wage 2013. Heavily criticized and contested, these new minimum wages came about after a lot of struggle and […]

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