B Lab's New Standards Impact Topic: Fair Work
B Lab’s standards define the performance that a company must meet and continuously improve upon to achieve and maintain B Corp Certification. Since 2006, we have evolved the standards to improve their impactfulness and clarify what it means to be a leading business, incorporating feedback from diverse stakeholders.
To achieve these goals, the new standards require companies to meet specific requirements across seven Impact Topics. While we have developed the new standards with the existing standards in mind, you can expect to see new topics and evolved requirements where topics overlap, designed to improve business impact.
After all, the B Corp community is built on the principle of continuous improvement.
A company’s greatest asset is its people—and creating good jobs with fair pay, clear expectations, and open dialogue is essential for building a just and equitable economy. Bernard Gouw highlights how the new Fair Work standards help companies center their people, fostering workplaces where workers feel valued, heard, and empowered to contribute to a shared sense of purpose.
Describe the impact topic in a nutshell:
Fair Work is about building workplaces where employees feel valued, heard, and empowered. When businesses prioritize Fair Work, they create environments where workers thrive–and when workers thrive, companies do too.
What is the purpose of the topic, and why does it matter in today’s world?
All workers deserve to be treated fairly and with dignity. While workers’ priorities and issues vary by industry and location, fair wages and reasonable, clearly-defined expectations are universal concerns. Formal mechanisms for workplace dialogue, and to measure workplace culture, are also important — these create avenues to address the priorities and issues that are unique to each workplace.
Good quality jobs, free and open dialogue, workplace culture, and shared purpose are all intertwined under the umbrella of Fair Work. Exchanging information and feedback helps to create a positive workplace culture and direct companies’ efforts to continuously improve. Companies that achieve open dialogue and positive culture realize a vision for stakeholder governance in the workplace, and create a shared sense of purpose. These are vital preconditions for the success of purpose-driven companies, like B Corps.
At its core, Fair Work is about recognizing that people are a company’s greatest asset. When businesses create environments where workers feel heard, valued, and empowered, they contribute to a more just and equitable economy.
How has the emphasis of the topic changed throughout the development process and what factors contributed to that?
In the Fair Work Impact Topic, we brought together two topics from our previous draft: Fair Wages and Workplace Culture. This entailed moving requirements related to suppliers to the Human Rights Impact Topic. Now, Fair Work captures essential requirements related to a company’s own workers in one place.
Throughout its journey, the Fair Work content changed in several important ways.
Added new requirements — We introduced two new requirements for companies to set clear expectations of employees, including by providing employment contracts.
Focused wage action — We re-positioned living wage and collective bargaining as the ideal approaches to setting wages for the lowest-paid. All companies with workers must at least work on living wages or pay collectively-bargained wages.
Increased wage flexibility — At the same time, we added new options. This acknowledges that barriers to increasing wages are sometimes outside a company’s control, and that inconsistent living wage methodologies create an uneven playing field globally. Companies not paying a living wage or collectively-bargained wage complete other actions related to their lowest-paid workers, such as publicly sharing their high-to-low wage ratio, providing universal childcare, or collective action on wages.
Refreshed workplace culture themes — We removed “mental health” as a workplace culture theme to avoid employers measuring or diagnosing mental health without the right clinical expertise. Instead, we require employers to focus on proxy themes that are more appropriate for them to measure, such as wellbeing, belonging, and psychological safety.
What Impact Topic requirement(s) are you most excited about - and why?
The sub-requirement to “consider feedback from workers on decisions that affect them” perfectly captures what we’re looking for in this topic. All companies make decisions that affect their workers—workers who deserve to have their feedback considered.
Employers and workers don’t always have to agree. But good stakeholder governance requires a sincere effort to hear different views and be transparent. That’s why one of the compliance criteria is for the company to communicate decisions back to workers.
What similarities are there between this new Impact Topic and the existing standards?
Companies will see many familiar themes, such as engagement & satisfaction, employment contracts, payslips, wage gaps, and collective bargaining. Living wage also reappears, building on the additional criteria and guidance developed for the existing standards in 2022-2023. Specifically:
We’re using the same list of 19 approved living wage sources
We’re using the same approach to calculate actual wages, including which extra wage components can be included (e.g. allowances, fixed bonuses, and tips under certain conditions)
Where the minimum wage is a living wage, paying the minimum wage counts as paying a living wage.
Two notable changes are that a living wage is now always based on family needs and we’ve simplified some key terms. “Prevailing wage” is now “total wage” and instead of living wage “benchmarks” we use “estimates”.
Where are the biggest growth areas for companies?
Fair Work covers a wide variety of “fair wages” concepts, some of which may be new to companies. In our standards, fair wage practices include:
Preventing unfair wage gaps by not requesting wage histories when hiring, setting transparent wage scales, and informing workers what wages and benefits they’re entitled to.
Calculating, closing, and publicly sharing the gender wage gap.
Evaluating equal pay for work of equal value.
Implementing practices to benefit the lowest-paid workers, such as paying a living wage or collectively-bargained wage.
Many of these requirements only apply to larger companies as a large workforce is needed to make them meaningful (e.g. gender wage gap).
What is your biggest tip for companies working towards the new standards / this topic in particular?
Embrace worker feedback. An engaged and satisfied workforce working quality jobs will contribute meaningfully to the company’s purpose. This impact topic provides flexibility in how companies engage their workforce. For example, they can choose the workplace culture themes to measure or the type of employee representation mechanism.
As companies come across options in the standards, use worker feedback to make those choices. This helps create positive feedback loops—better inputs will lead to better outcomes, which will lead to even better inputs, and so forth.
Is paying a living wage mandatory?
No. Paying a living wage is not mandatory for several reasons.
We want to recognize collective bargaining as a valuable alternative.
Companies face various legitimate barriers to paying a living wage.
Living wage methodologies are inconsistent, making it difficult to set consistent global requirements.
We hope in the future we can require all B Corps to pay a living wage or collectively-bargained wage. This ambition stems from our vision to lift workers out of poverty and transform economic systems. We commit to monitor and support initiatives that can help address our challenges.
In particular, we’ll work with Wage Map to see how their efforts on global standardization can unlock opportunities and monitor work by the International Labour Organization on how living wage and collective bargaining can be used together.
Is a living wage for an individual or a family?
In the new standards, a living wage is for a family. We define a living wage as: Sufficient pay for a worker to afford a decent standard of living for them and their family, assuming a standard workweek.
Do companies without workers have any Fair Work requirements?
No, companies without workers are exempt from this topic.
How is “worker” defined?
A person who works for the company as any of the following.
- An employee
- An independent contractor, if they work more than 20 hours per week indefinitely or for more than six months.
- An agency worker, if they work more than 20 hours per week indefinitely or for more than six months.
In the standards, we refer specifically to “worker” or “employee” so that the focus of the requirement is clear.
How is “fair work” in the context of supply chain workers captured?
The Fair Work Impact Topic focuses on a company’s own workers. All requirements related to a company’s supply chain are captured under the Human Rights Impact Topic. HR4 includes requirements for companies to work with their suppliers on their salient human rights issues, which may include worker-related issues. HR4 also requires action on living wage and living income in the supply chain. Do you have more questions on the content of B Lab’s new standards? Join the Q&A session with the Standards Management Team on 29 April 2025. Log in to your regional community hub or reach out to your regional B Lab team to register. Want to learn more about the other Impact Topics in B Lab's new standards?
🪧 Purpose &Stakeholder Governance
🪧 Government Affairs & Collective Action
🪧 Justice, Equity, Diversity & Inclusion [COMING SOON]
🪧 Human Rights [COMING SOON]
🪧 Environmental Stewardship & Circularity
🪧 Climate Action [COMING SOON]