Fair Labor Association (FLA) released its Responsible Planning and Purchasing Guidance for Companies (August 2026). The guidance is informed by industry-leading labour rights standards and frameworks, FLA's evaluation of over 50 companies' responsible purchasing and production practices over the last decade, insights from conversations with buyers, and purchasing trends and publicly available information.
Human Level’s Take:
- Planning and purchasing decisions ripple straight through to the factory floor. As FLA sets out in its new guidance on responsible purchasing practices (RPP), a well-planned production calendar or fair payment terms can support decent working conditions, just as a late order, a rushed forecast or a missed payment deadline can affect a worker's safety or their overtime pay.
- FLA sets out a three-part strategic framework for purchasing companies in the manufacturing industry: laying a foundation through an RPP policy and cross-functional staff training, building partnerships with suppliers through communication and accountability systems, and preparing for the unexpected through risk assessment, stakeholder engagement and responsible exit planning.
- Within this framework, FLA points to five areas where buyer decisions create risk for workers: cost negotiation, payment terms, calendar adherence, planning and forecasting, and measuring capacity.
- Where RPP is absent, the guidance warns of a "race to the bottom.” The resulting impacts on workers can range from excessive overtime and inaccurate compensation to a lack of safety measures and stressful working environments.
- Beyond the impact on workers, irresponsible purchasing practices carry commercial consequences. FLA notes that businesses viewing social responsibility from an incident-based, reactive perspective may face financial and operational consequences, with targeted campaigns, boycotts and tangible legal repercussions following human rights impacts. Buyers may also face regulatory action, with Withhold Release Orders from U.S. Customs and Border Protection and enforcement of the EU's Forced Labour Regulation given as examples of consequences that can restrict operations and lead to major financial impacts on buyers.
- FLA frames RPP as an opportunity, not just a way to minimise harm on suppliers workers and communities. Getting this right can help buyers build more resilient supplier relationships and lead to strengthened supply chain resilience.
Some key takeaways:
- Purchasing decisions across the value chain create risks and opportunities: Responsible purchasing practices refers to procuring goods and services in ways that do not negatively impact human rights or the environment, built on collaboration and mutual partnership between buyers and suppliers. This spans the full range of business operations buyers engage in to bring a product to market, from sales, merchandising and product development through to planning, sourcing and payment terms. FLA traces how decisions taken at each of these stages can shape workers' realities, pointing to five areas where buyer decisions create risk for workers: cost negotiation, payment terms, calendar adherence, planning and forecasting, and measuring capacity. Delayed payments or unexpected changes in payment terms, for example, can create financial instability for suppliers, in turn making it challenging to maintain regular and fair wages. In other cases, short lead times or unplanned changes can mean workers must work longer hours or extra shifts, resulting in higher labour costs or premium overtime rates for suppliers and potentially unpaid overtime wages where suppliers do not or cannot cover the additional costs. Conversely, FLA points to examples from its members where transparent costing exercises, automated payment processes, jointly developed production calendars and accurate forecasting have helped build trust, financial certainty and stability for suppliers and workers alike. Embedded across business functions in this way, RPP can offer better outcomes for workers, while also producing more stable business partnerships and strengthened supply chain resilience.
- Irresponsible purchasing practices carry commercial as well as human costs: Where RPP is absent, the guidance warns of a "race to the bottom" rather than a "race to the top": irresponsible purchasing practices harm workers and can also lead to short and long-term business and sustainability struggles, including sustainable product lifecycle management issues, higher numbers of product defects and lowered rates of customer satisfaction. Purchasing companies that view social responsibility from an incident-based, reactive perspective may face financial and operational consequences, leading to dissonance between their commitment and programme implementation. Targeted campaigns, boycotts and tangible legal repercussions following human rights impacts are examples of how spot-treating planning and purchasing problems can inflict long-term harm to a business's value and protection. Buyers may also face regulatory enforcement when issues arise, such as Withhold Release Orders from U.S. Customs and Border Protection and the EU's Forced Labour Regulation, which can severely restrict operations and lead to product detentions with major financial consequences. Incidents like these, FLA argues, can be prevented through strong cross-functioning, collaborative and proactive planning and purchasing practices.
- Building shared responsibility through policy, partnership and preparedness: The FLA guidance sets out a three-part strategic framework for purchasing companies in the manufacturing industry to get this right. This framework starts with an RPP policy that gives shape to a buyer's commitments: addressing financial terms, lead times and balanced annual planning, recognising that suppliers vary in size, structure and capacity, requiring collaboration and regular communication among internal departments, suppliers and any contracted agents or intermediaries, and building in order-reduction procedures, accountability metrics and incentives for suppliers acting responsibly. The second part of the framework, building a partnership between buyers and suppliers, sets remediation as a shared responsibility: when supplier and labour issues are a clear result of purchasing practices, FLA frames the response as one that buyers, suppliers and affected workers must address together, pointing to excessive overtime as an example. In addition, the framework advises buyers to expect the unexpected, extending the principle of shared responsibility to how sourcing relationships begin and end. Before a relationship starts, the guidance recommends buyers proactively assess whether a supplier can realistically meet production expectations without creating labour risks, alongside consideration of broader regional and country-level risks such as local labour law enforcement, civic space and recruitment-related risks. Throughout, worker voice remains central, with buyers encouraged to map and engage workers, unions and civil society organisations, and to work alongside other buyers where the pressures driving labour rights issues are systemic rather than specific to one buyer alone. Where a relationship ends, FLA sets out seven steps for a responsible exit, from conducting a risk assessment and giving adequate notice, to phasing out operations gradually and meaningfully engaging trade unions and civil society organisations throughout.
