WRC Factory Investigation

Konffetty S.A. de C.V.

Factory: Konffetty S.A. de C.V.

Key Buyers: Vive La Fete

Year: 2019

Case Summary

The Worker Rights Consortium (“WRC”) issued a comprehensive report uncovering extensive wage theft and related violations of university labor codes by Konffetty S.A. de C.V. (“Konffetty”), a garment producer in El Salvador that is the sole disclosed supplier to university licensee Vive La Fete, a maker of high-end university logo children’s clothing, and Recursos Humanos de Latinoamérica (RHLA), a labor subcontractor to Konffetty. In early 2017, the WRC initiated an investigation in response to a complaint received from the Salvadoran women’s rights organization, Mujeres Transformando, charging violations of the rights of women who work from their homes (“homeworkers”) embroidering designs – some of which are university logos and mascots – that are sewn into garments supplied by Konffetty to Vive La Fete. While the minimum wage for garment workers, including homeworkers, in El Salvador is $1.23 per hour, the WRC found that the 200-300 homeworkers employed by the supplier and subcontractor were paid $0.41 to $0.45 per hour, roughly one third of the legal requirement. This wage theft is compounded by the factory’s failure to pay the required premium for overtime performed by these workers, which averages more than 100 hours per month, and by its failure to pay any of the legally mandated benefits the homeworkers are due.

Konffetty and Vive La Fete have justified these pay practices by claiming that Konffetty has no obligation to obey labor standards where these homeworkers are concerned. They argue that the workers are independent contractors with no rights as employees. Yet Salvadoran law explicitly states that all laws concerning wages, hours of work, and benefits apply to homeworkers and require employers to pay the homeworkers accordingly. Therefore, Konffetty’s labor practices violate the labor laws of El Salvador and, by extension, both Konffetty and Vive La Fete are in violation of university codes of conduct.

Konffetty and its subcontractor RHLA have also violated workers’ right to freedom of association by retaliating against them for communicating with the Salvadoran women’s organization, Mujeres Transformando. Konffetty has deprived some homeworkers of embroidery assignments, threatened to deprive others, and, in an unprecedented move, communicated to the WRC through Vive La Fete’s attorneys in the US the threat to deny work permanently to all of these workers by moving embroidery operations in house. The WRC has attempted to secure remedial commitments from Vive La Fete. However, the company has offered very limited remediation, including a proposed a wage increase that represents a very small fraction of the increase needed for Vive La Fete to come into compliance with the law and offered payment of back wages equivalent to less than 1% of what workers are owed. Moreover, Vive La Fete has refused to require Konffetty and RHLA to pay legally mandated benefits.

The WRC will continue to urge Vive La Fete to require compliance and remediation by Konffetty and RHLA.

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