80,000 Shahi Exports Workers Will Finally Get Their Back Pay

In a major breakthrough in the efforts of the Garment and Textile Workers’ Union in Karnataka, India, the Worker Rights Consortium, and a growing list of labor rights advocates, to address the refusal of suppliers in Karnataka to pay the legal minimum wage—a violation that has affected 400,000 workers, who are collectively owed nearly $60 million—Shahi Exports, the country’s top exporter, became the first to commit to pay arrears.  

As was reported in the Guardian in December, these violations—which we believe may be the worst minimum wage violation in the recent history of the global garment industry—is affecting workers’ ability to put food on the table for their families and meet other basic needs.  

Yesterday Shahi Exports, India’s largest garment manufacturer, announced that it will begin paying its 80,000 workers in Karnataka immediately the correct minimum wage and will provide them with full back pay for the prior underpayment, which the WRC estimates, in the case of Shahi’s workers alone, to total $10 million since a minimum wage increase went into effect in April 2020. Shahi has committed that roughly half this back pay will be paid to workers in the next 10 days; however, workers will still need to wait until May 10 to receive the remainder with their April wages. 

Though these are all legal minimum wages, whose payment should have never been denied in the first place, Shahi’s commitment is a significant step forward. It will benefit workers who produce apparel for many major brands, including H&M, Abercrombie & Fitch, and Nike. And it is an important reaffirmation of rule of law and the need for workers to be made whole when labor laws are broken. 

There are two brands that deserve credit for their energetic engagement with suppliers in Karnataka, in an effort to convince suppliers to implement the minimum wage increase and pay all arrears. While all brands sourcing from Karnataka bear responsibility for not acting much sooner to address this sweeping wage theft, these two brands—Gap Inc. and PVH (which owns Calvin Klein and Tommy Hilfiger)—have stepped up forthrightly in recent months, and their efforts have helped catalyze the progress we are now able to report.

With this important garment supplier committed to pay in full, it is vital that the payment be made in full, that all former as well as current workers are paid, and that other suppliers in the region follow suit.