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RMG sector wage hike may be adjusted against upcharge
Aug '10
According to the industry sources, the recent wage hike granted to the RMG workers will not in any way affect production as it is believed that buyers from foreign countries would bear this additional burden by paying the 'upcharge'.

Upcharge is a provision, under which producers convince the buyers to shift on themselves the burden of any extra costs incurred for whatsoever reason.

AKM Selim Osman, the new President of the Bangladesh Knitwear Manufacturers and Exporters Association said that the wage hike would not much affect the producers as they foresee drawing 15-20 percent of the production cost by way of upcharge, which is besides other regular expenses.

Around three million RMG workers will benefit from the eight tier wage structure by the government, after it fixed the minimum grade pay for grade-7 workers at Tk 3,000 and for apprentices at Tk 2,500.

The new wage rates will become payable from November 1 and the workers over and above these minimum wages will also be entitled to all other benefits as provided under the Bangladesh Labour Act, 2006.

An official of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) divulged that, almost all of the overseas buyers are likely to pay upcharge to the domestic producers. But then, though they anticipate positive response from majority of the buyers, this will be effective only the post November 1 shipments, he said.

Fibre2fashion News Desk - India

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