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H.1 Overtime Guatemalan law states that the normal work week for the factory studied consists of eight hours per day, Monday through Friday, and four hours on Saturday for a total of 44 hours. The maximum number of hours per week is 60. All overtime must be voluntary. Management is required to have prior consent in writing from all who wish to work overtime. Once such a document is signed, a worker is legally obligated to fulfill the promised overtime.

We have received numerous reports of management and peer pressure for workers to work overtime. The management pressure is usually described by workers as threats of dismissal or invitations by supervisors to submit their resignations. The peer pressure comes from fellow workers, who complain that those who don't work overtime undermine the efforts by the entire line to meet the high production goals required to qualify for production bonuses.

In response the factory has informed COVERCO that at the start of each wage period workers are asked if they are willing to undertake overtime. Those that wish to work overtime sign a form to this effect. The disorganized state of the personnel files has prevented effective verification of this issue.

COVERCO received 54 complaints from workers who claimed they were pressured to work overtime.

H.2 Overtime for minors under 18 years of age (see Finding B.2 above)


I.1 IGGS Cards There have been delays in the preparation and handing over of IGSS (public health service) cards. The factory has stated that they have done their part in submitting the documents for processing, but that workers were slow in bringing in the required photos and that the local IGSS office does not process the forms promptly. The factory has now provided a subsidized photo service to speed up the process.

I.2 Payroll records - According to Guatemalan law, if the payroll records are kept in the computer the Ministry of Finance must authorize the system by assigning a corresponding number. The factory has promised to initiate a new payroll system and ensure it is legally authorized.

I.3 Language Under Guatemalan law instructions to workers may not be given in a language other than Spanish. The majority of non-Guatemalan managers speak very little Spanish. Now the factory has arranged for non-Guatemalan staff to receive 4 hours of Spanish lessons per week.

I.4 Internal work regulations - The factory has the right to create internal administration and finance policies that are not contemplated by legal codes. However, local law requires that the factory must receive authorization by the Ministry of Labor to apply such internal policies. The factory had previously developed such an internal policy which was authorized by the Ministry of Labor. Later, recognizing that this first document was inadequate, they enacted a second one. At the moment the policy document in use is pending authorization by the Ministry of Labor.

I.5 Childcare - The factory has not made available the childcare services stipulated by Guatemalan law. The factory has informed us that at the moment it is not possible to change this situation. We note that in Guatemala at present there are no factories in the apparel industry providing this legally mandated service.

I.6 Lack of training for workers We believe that many issues arise due to the lack of understanding by the workers, line supervisors and managers of not only their rights under LCI´s Standards of Engagement, but also their obligations and responsibilities.

In response to this, the factory has placed information memos and posters in the factory and has made announcements over the p.a. system. They have also committed to improving the training of line supervisors and managers. Verification of these training sessions for supervisors and workers is still pending.

LCI, in consultation with project facilitators, conducted training sessions in November 1998 and June 1999 to educate workers and managers on the LCI Standards and applicable Guatemalan law.

In addition, as a joint effort, COVERCO, LCI and the factory management are developing an illustrated booklet explaining the Standards in easy-to-understand format.


•  So that we can monitor compliance with the Standards of Engagement, as well as Guatemalan law, we reiterate the need for COVERCO to be given full access to personnel files and payroll records. All such records must be complete.

•  Despite the efforts of LCI and factory management, much work has yet to be done to consolidate the line of command and the new grievance procedure in the factory. Middle-level management has demonstrated only a limited ability to change existing procedures and attitudes. We also note that new middle-management personnel, both Guatemalan and non-Guatemalan, have not been trained in the Standards of Engagement, the line of command or the newly-implemented grievance procedure. COVERCO recommends that all new management personnel, both Guatemalan and non-Guatemalan, be provided with introductory training and documentation on these issues.

•  COVERCO affirms that both LCI and local management have provided training to management and workers. LCI and local management have also expressed their commitment to further training. COVERCO recommends that LCI and local management design and implement mechanisms to evaluate the effectiveness of the training already imparted. In addition, we recommend that they use the results of this evaluation as a basis for designing a permanent training program for management and workers. We recommend that this permanent training program be built around three key elements:

a practical working knowledge of the LCI Standards of Engagement, the new grievance procedure and the line of command.

emergency procedures for earthquakes, fire and all natural disasters.

elementary first aid procedures, with special attention to the needs of pregnant women.

•  COVERCO recommends that local management continue to develop appropriate shifts and schedule options that will permit working minors to continue their studies. COVERCO also recommends that this information be communicated promptly and clearly to all working minors.

•  Communication continues to be a key issue in improving labor relations at the factory. COVERCO recommends that non-Guatemalan personnel be required to study Spanish at least 8 hours per week until they can demonstrate spoken proficiency in dealing with production and management issues, as well as health and safety issues. A better option would be for new non-Guatemalan managers to spend at least 6 weeks studying 4-6 hours per day at one of the many local language schools. Study should include orientation to Guatemalan history and culture. COVERCO also recommends that memoranda and all other correspondence sent by management to workers be written in simple and understandable Spanish.

•  COVERCO notes that the existing bonus system is linked to an extensive system of deductions (for tardiness, absence, failure to meet production quotas, etc.). We have documented that workers interpret the existing system as one of punishment instead of positive reinforcement. This negative interpretation has fuelled significant worker discontent. COVERCO recommends that local management redesign their bonus system and explain it clearly to workers so that the emphasis is on rewards for productive behavior.

•  COVERCO recommends that local management allocate the necessary resources to keep all restroom facilities clean and fully operational at all times.



Liz Claiborne Code of Conduct / Standards of Engagement.

Upon joining the Apparel Industry Partnership, and demonstrating our commitment to its goals, we have adopted the AIP's Workplace Code of Conduct as our own Standards of Engagement and Human Rights policy.

Liz Claiborne Inc. and its subsidiaries are committed to producing high quality products at a good value to our consumer. The Company follows the letter and the spirit of all applicable laws, and maintains a high standard of business ethics and regard for human rights. Moreover, we require sound business ethics from our suppliers. Suppliers must observe all applicable laws of their country, including laws relating to employment, discrimination, the environment, safety and the apparel and apparel-related fields. Suppliers must comply with applicable United States laws relating to the import of products, including country of origin labeling, product labeling and fabric and product testing. If local or industry practices exceed local legal requirements, the higher standard applies.

Forced Labor. There shall not be any use of forced labor, whether in the form of prison labor, indentured labor, bonded labor or otherwise.

Child Labor. No person shall be employed at an age younger than 15 or younger than the age for completing compulsory education in the country of manufacture where such age is higher than 15.

Harassment or Abuse. Every employee shall be treated with respect and dignity. No employee shall be subject to any physical, sexual, psychological or verbal harassment or abuse.

Nondiscrimination. No person shall be subject to any discrimination in employment, including hiring, salary, benefits, advancement, discipline, termination or retirement, on the basis of gender, race, religion, age, disability, sexual orientation, nationality, political opinion, or social or ethnic origin.

Health and Safety. Employers shall provide a safe and healthy working environment to prevent accidents and injury to health arising out of, linked with, or occurring in the course of work or as a result of the operation of employer facilities.

Freedom of Association and Collective Bargaining. Employers shall recognize and respect the right of employees to freedom of association and collective bargaining.

Wages and Benefits. Employers recognize that wages are essential to meeting employees' basic needs. Employers shall pay employees, as a floor, at least the minimum wage required by local law or the prevailing industry wage, whichever is higher, and shall provide legally mandated benefits.

Hours of Work. Except in extraordinary business circumstances, employees shall not be required to work more than the lesser of 60 hours per week or the limits on regular and overtime hours allowed by the law of the country of manufacture. Except in extraordinary circumstances, employees shall be entitled to at least one day of rest in every seven day period.

Overtime Compensation. In addition to their compensation for regular hours of work, employees shall be compensated for overtime hours at such premium rate as is legally required in the country of manufacture or, in those countries where such laws do not exist, at a rate at least equal to their regular hourly compensation rate.

*** If you believe that these Standards of Engagement are not being upheld or if you have any questions regarding these Standards of Engagement, please contact the Liz Claiborne country manager. Your identity will be kept in confidence.


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