Exploited Filipino workers paid starvation wages by BPO provider



filipino-workersThe Sauce has received shocking reports on the treatment and conditions of contact centre workers in Davao city, the Philippines. Working for a BPO provider owned and operated by an American citizen, the workers are being paid less than half of the minimum living wage needed in the Philippines. And those who complain are likely to receive a visit from the local police and authorities.

Earlier this month, we received a note from an employee (we have withheld the name of this employee and others we have interviewed for their protection) who works as a virtual assistant (VA) and gets paid $US 1 per hour for an 8 hour day. The company they work for charges its clients between US6.30 and $8.70 an hour depending upon the number of hours worked.

On these numbers the wages component is between 11% to 16% of the revenue generated. Given that this is a business that you buy by the hour the gross profit component is impressive.

Only problem is that this profit is achieved by exploiting knowledge workers who are powerless to stand up to the exploitation.  Clearly these slave wages are not enough to survive on and they fall well short of the minimum rate of $US 350 per month mandated by local authorities. Most of these workers are forced by necessity to take on additional work via on line platforms like,, Odesk and just to make ends meet.

One worker we spoke to sleeps on average 3 hours a day as he struggles to put food on the table for his young family. This company also exploits these hapless workers who are desperate for work by paying them US$2.50 a day (Training Allowance) and taking two to three months to ‘train’ them.

The Philippines is a place where access to medical assistance is provided by the employer. In fact it’s a standard part of the employment conditions for BPO service providers, so people rely upon it as part and parcel of their employment rights, however this company makes its employees wait a whole year before they allow them to receive any company funded health benefits.

The situation is not all that much better after the first year probation period is over as the company does not provide an attending nurse or sick bay to cater for staff – which once again is mandated by Filipino labour laws.

As the company has no sick bay for those who would need to rest and are not feeling well, workers are forced to sleep on a bench outside the premises or at a local canteen located outside the office. Given the company has over 1,000 employees, that can be a busy bench.

  The company works through the night servicing its US clients yet provides no break out areas. Instead, agents are forced to go outside the building and look for a canteen. Given that over half the employees are female, from an OH&S point of view that is putting their night crew at serious risk. Neither are there any fire or emergency exits provided. If there was a fire it could be a catastrophe somewhat similar to the recent disaster in Bangladesh.

Yet if they complain they can expect some rough treatment from the company and it would appear that the local police are in on the game. The company, at its own discretion, can accuse and have these workers arrested accusing them of stealing clients and client information and working for them in their own time. The police need no evidence to search a person’s home and sieze what ever they like, including computer files and equipment.

Not only is this highly irregular and moreover illegal, it is tramping on their civil rights and denying them natural justice.

The Sauce will continue investigating this story and hopefully soon will be able to name the BPO provider in question.

Everybody understands that one of the drivers to outsource in the first place is the cost differential between western countries and these developing nations, and that outsourcing helps to redistribute wealth around the globe. It has helped in bringing millions of people across the world out of poverty.

This bottom feeder organisation tarnishes the reputation of the Philippines entire industry by exploiting its work force. The clients of this company are most likely completely unaware of what is going on in their name. One of the clients is a religious charity and another is a kids safety program – which kind of smacks of double standards. None the less ignorance of these practices is no excuse and in the same way that corporate giants like Apple or Nike  look at their supply chain so to should companies or individuals who are using these cheap as chips outsourcing service providers.

August 27, 2013

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