Social and Labor Audits

Organizations request their suppliers to provide them with Social and Labor audits to assist them in demonstrating that their transparency, accountability, and ethical practices extend to their supply chain. We operate in a global economy with a large array of standards. Often, buyers do not have the opportunity to meet their suppliers or visit their locations. The tool that buyers use is the Social and Labor Audit conducted by an independent assessor. This gives the buyer a high-level view of the conditions at their suppliers’ locations, including assessing the supplier’s social, labor, and environmental standards and compliance with regulatory requirements.

• Supplier Compliance: There is a move towards buyers requiring their suppliers to undergo social and labor audits. These audits ensure that their suppliers comply with labor and environmental laws. They may also go beyond the basics and require other standards that the organization considers key to their success and required to protect their reputation.
• Maintaining Standards: An independent audit by a reputable audit firm allows organizations to strengthen oversight of the social and labor practices within their supply chain. This includes the standards set for their code of conduct/ethical behavior, local labor laws, environmental standards, and health and safety regulations.
• Human Rights and Fair Conditions: The primary purpose of a social and labor audit is to provide assurance that an organization’s suppliers maintain fair and safe working conditions and do not harm the environment. These audits show that an organization has done their due diligence to align with their customers’ values and brand image and comply with legal requirements.

The auditor’s role includes touring workplaces, reviewing payroll records, interviewing workers, and performing a high-level assessment of an organizations compliance with the standards deemed important to the buyer and the supplier. The standards depend upon the industry and the types of services provided by the supplier. The typical audit will include: 1) An opening meeting to finalize scope and timeline for the audit, 2) Review of policies and procedures, 3) Site visits including health and safety tours, interviews, review of employee documentation, and a closing meeting, and 4) the Audit report.