Previously in this series:

Article 1 Introduced SMETA as a globally recognized ethical audit framework developed by Sedex, designed to help companies assess labor, environment, health and safety, and business ethics standards within their supply chains.

Article 2 covered the four key pillars of SMETA: Labor Standards, Health and Safety, Environmental Impact, and Business Ethics, explaining how each pillar supports responsible sourcing and compliance expectations from global buyers.

Now, in Article 3, we take a deeper look at the first and most scrutinized pillar: labor standards. For suppliers and vendors across North America, understanding and meeting these requirements is essential not only for compliance, but for maintaining long-term partnerships with leading global brands.

If you're a supplier or vendor to a global brand, chances are you've heard of SMETA. But what does it actually require from you, especially when it comes to how your teams are treated?

SMETA, the Sedex Members Ethical Trade Audit, sets clear expectations around workplace rights.

This article is focused entirely on labor standards. In simple terms, it asks: Are people working in safe, fair, and legal conditions throughout your operation?

Whether you run a production facility, logistics center, farm, or packaging plant, these standards apply to you. And for supply chain partners in North America aiming to retain or win business with top-tier brands, compliance with Article 3 is non-negotiable.

Here’s what you need to know.

1. Employment Must Be Voluntary

SMETA prohibits forced labor in any form. That includes bonded labor, indentured work, or pressuring employees to work through withheld wages or documents. Workers must be free to leave employment after giving reasonable notice, and no one should be required to deposit money or hand over identification documents. This principle applies just as much to subcontracted labor and third-party recruiters. If your hiring processes aren’t transparent, it’s time to review them.

2. Freedom of Association and the Right to Bargain

All workers must be free to join trade unions or worker associations, or to choose not to, without fear of retaliation. Employers must not interfere with these rights. Even in non-union workplaces, this means encouraging open communication between employees and management. SMETA checks that employees feel safe raising concerns and that formal processes exist to resolve issues fairly.

3. Health and Safety Are Mandatory

Safe working conditions are a baseline requirement. Under SMETA, employers must identify, assess, and manage all health and safety risks. This includes proper training, emergency protocols, access to clean restrooms, drinking water, and first aid. If your workplace uses machinery, chemicals, or high-risk processes, additional protections like personal protective equipment and machine guarding are expected. Documentation, signage, and regular safety audits should all be in place.

4. No Child Labor

Children must not be employed under any circumstances. SMETA aligns with international standards that prohibit employing anyone under the legal working age or under 15, whichever is higher. If child labor is discovered in your operation or among your suppliers, SMETA requires that you take immediate, responsible action to remove the child from work and support their return to school. This is especially relevant for vendors sourcing materials from regions with less formal  oversight.

5. Fair Wages, Paid Transparently

All wages must meet or exceed local minimum wage laws, and employees must understand how their pay is calculated. Written employment contracts and itemized payslips are required. Deductions must be legal and clearly explained, and wages should be paid regularly and in full. For vendors with seasonal or piece-rate workforces, transparency is critical. Unclear or inconsistent pay practices are among the most common SMETA non-compliances.

6. Working Hours Must Be Reasonable

SMETA aligns with international norms: a standard workweek should not exceed 48 hours, with at least one day off for every seven worked. Overtime must be voluntary, not routine, and should not exceed 12 hours per week. Time records should be accurate and reflect actual hours worked. If you're relying on outdated or manual systems, it may be time to upgrade your time-tracking tools.

7. No Discrimination

Hiring, promotions, compensation, training, and termination must be based on qualifications and job performance. Discrimination based on race, gender, religion, age, disability, sexual orientation, or any protected category is prohibited. You should be able to demonstrate that your hiring and management practices are fair, inclusive, and well-documented. Job postings, interview procedures, and performance reviews should be consistent and transparent.

8. Employment Must Be Legal and Secure

Avoid relying on temporary or contractor labor to bypass labor protections. SMETA expects employment relationships to be regular and legally compliant, with access to benefits where applicable. If you use third-party agencies or contractors, ensure they meet the same labor standards. You are responsible for the conditions of everyone working under your brand or within your operation.

9. Treat Workers With Dignity and Respect

Physical or verbal abuse, harassment, threats, and intimidation are strictly forbidden. Every worker must be treated with dignity. SMETA auditors look for clear grievance mechanisms, anonymous reporting channels, and documented investigations. If your team can't safely report concerns or doesn't trust the system, that’s a red flag.

When Labor Standards Are Ignored: Real-World Consequences

Violating labor standards isn’t just unethical, it’s expensive, damaging, and very public. In late 2024, a pork processing plant in Iowa was found to have employed children as young as 13, working with dangerous chemicals and equipment. The contracting firms faced hundreds of thousands of dollars in fines and national media scrutiny. Similar cases have hit restaurant chains and manufacturers across North America. In New York, a local pizza chain was ordered to pay over $1 million in back wages and damages after failing to pay proper overtime. And in Alabama, Phenix Lumber became known as the deadliest workplace in America, racking up over $5.3 million in OSHA fines and nearly 200 violations before it was forced to shut down. Even well-known brands aren’t immune. Chipotle has faced backlash over eroding labor conditions, leading to lawsuits, settlements, and a very public hit to its employer reputation.

When Your Supplier Fails, So Could Your Business

• When Suppliers Violate Labor Laws, You Pay the Price
• Ignoring labor violations within your supply chain doesn’t just harm workers, it can trigger serious consequences for partnering brands.
• Mar-Jac (Chick-fil-A supplier) was fined
• $385,000 for child labor violations at a Mississippi facility, citing systemic failings in oversight.
• Perdue Farms had to pay $4 million in restitution plus a $150,000 fine after children were found in hazardous roles deboning chicken past school hours, an incident linked back to staffing contractors in its supply chain.
• Packers Sanitation Services Inc (PSSI), a cleaning contractor for major meat processors, employed over 100 minors in dangerous jobs and was fined around $1.5 million. The fallout led to a rebranding effort under the name Fortrex.
• Hyundai’s U.S. parts suppliers were implicated in hiring minors, some as young as 12, to operate heavy equipment. The violations led to fines, forced training programs, and a court-ordered ban on shipping non-compliant goods.
• In a landmark case under the Trafficking Victims Protection Reauthorization Act, Bumble Bee Foods has been sued by Indonesian  fishermen  who  allege  they were subjected to abuse and forced labor aboard vessels supplying Bumble Bee. The case highlights risks of legal liability even when violations originated with independent suppliers.

These examples send a clear message to suppliers and vendors: if your labor practices fail an audit, it’s not just a fine, it could be your brand, your contracts, or your business at risk.

Why This Matters for Vendors

Global buyers are under increasing pressure to prove their products are made ethically. That scrutiny is shifting directly to suppliers and subcontractors. If you want to stay competitive in the global supply chain, aligning with SMETA labor standards is a must. Eurocert conducts SMETA audits across North America to help vendors like you identify risks, correct issues, and demonstrate your commitment to ethical practices. These audits aren’t about punishment, they’re about building long-term partnerships based on trust, transparency, and shared values.

Next Steps for Supply Chain Partners

• Review your labor policies and contracts
• Train supervisors on fair treatment and safety
• Audit your payroll, time tracking, and grievance systems
• Ensure you’re monitoring any subcontractors or labor agencies

When you meet SMETA labor standards, you're not just checking a box. You're showing buyers that you're a reliable, ethical partner in their supply chain. Let Eurocert help you get there. If you're a supplier, vendor, or logistics provider looking to prepare for a SMETA audit, or if you want to strengthen your labor practices to meet global compliance standards, let’s talk. At EUROCERT, we support organizations across North America with ethical auditing, compliance guidance, and practical solutions that build trust with your buyers.

Contact Patrick Mullen

Email: [email protected] In1 Phone: 732 570-8631

Let’s work together to help your business stay compliant, competitive, and audit-ready.

Coming Next: SMETA Article 4: Health and Safety in the Workplace

In the next article of our SMETA series, we’ll break down the Health and Safety pillar, what it covers, why it matters, and how supply chain vendors can prepare for compliance. From fire exits and chemical handling to training records and emergency protocols, this article will cover the key safety expectations SMETA auditors look for. Whether you operate a factory, warehouse, or distribution center, ensuring a safe, legally compliant workplace is not just about avoiding violations, it’s about protecting your people and your contracts. Stay tuned to learn what “safe and hygienic working conditions” really mean under SMETA, and how Eurocert helps vendors meet those standards with confidence.