Successful Distribution of US$1.1 Million to Salvadoran Workers
|To:||WRC Affiliate Universities and Colleges|
|From:||Scott Nova and Ben Hensler|
|Date:||June 19, 2015|
|Re:||Successful Distribution of US$1.1 Million to Salvadoran Workers|
The WRC has prepared an update regarding the successful remediation of severance violations at a collegiate supplier factory in El Salvador. Over the past two months, 1,118 workers at a Salvadoran collegiate supplier factory have collected more than US$1.1 million in severance benefits owed them since two sister factories, Manufacturas del Rio (MDR) and Central American Cutting Center (CCC), closed in January 2014. With this distribution, Fruit of the Loom (parent company of licensee Russell Brands) and Hanesbrands have fulfilled their remedial obligations at MDR/CCC.
As the WRC reported on April 29, 2015, Hanesbrands and Fruit of the Loom provided nearly all of the funds for this distribution. Checks for each worker were made available from April 27 through May 27, first at the Ministry of Labor and then at a local bank. Ninety-four percent of workers presented themselves to collect their funds during this period. Between this distribution and an earlier distribution of funds provided by the Argus Group, which operated the factory, workers have collected more than US$1.7 million over the past year.
The completion of this case, and the successful distribution of funds, is significant not only to the more than 1,100 directly affected workers and their families, but also in the broader context of the WRC’s efforts to address the failure to pay legally required severance benefits, a widespread practice in the global garment industry. The actions taken by Hanesbrands and Fruit of the Loom in this case constitute another positive landmark in licensees’ increased recognition of their responsibility to ensure that workers at their supplier factories who are denied legally required compensation are made whole, even when, as in this case, licensees must make direct payments.