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Wage Theft

Photo of workers protesting

Garment workers, who already receive subsistence wages, are often paid even less than they are owed when their employers fail to obey minimum wage, overtime, and severance laws. By targeting areas where violations are particularly widespread, and by responding to worker complaints at individual factories, we have successfully pressed many employers around the world to start obeying wage laws, and we have helped workers win over $25 million of legally-owed back pay—worth $74 million in purchasing power in workers’ home countries.

Case Study: Haiti

Before the WRC intervened in 2012, almost all Haitian garment factories failed to pay workers the minimum wage. In fact, many were paying workers 32 percent less than the legal minimum. Most factories also cheated workers of overtime pay. This theft of workers’ already poverty-level wages left 75 percent of workers in some areas unable to afford three meals a day for their families.

The WRC’s research and advocacy led to three major apparel brands committing to both end their supplier factories’ violations and to secure $250,000 in back pay for over 2,000 workers. Since we began this work in 2012, more than 10,000 workers across Haiti have seen their wages increase by 50 percent. The WRC continues to work toward the goal of all Haitian garment workers receiving their legally-earned wages.

Severance Pay

Workers are also often cheated out of their legally-owed severance pay, typically when owners shutter factories and abscond overnight. Because many countries where garments are made lack unemployment insurance, workers and their families depend on receiving severance pay when factories close.

Since 2010, the WRC and our allies have successfully pressed major brands like Nike, adidas, Gap, H&M, Disney, and Walmart to provide over $10 million in legally-owed severance to more than 6,000 former employees of shuttered factories around the world.

Recent Cases in which Violations Were Fully Resolved

Direct Ship Americas

In January 2019, the university licensee Fanatics, the WRC, and other stakeholders worked together to ensure compliance with university codes of conduct following the closure of Direct Ship Americas (DSA), a factory located in Choloma, Honduras. Fanatics informed the WRC about the closure before it occurred and reported that the factory, which owed its 240…

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League Central America

The WRC conducted an assessment of compliance with labor rights standards at League Central America (LCA), a garment factory located El Salvador that is owned and operated by the U.S. apparel brand known as League Collegiate Wear, Inc.  The assessment found violations of Salvadoran law in the following areas: Wages and Hours of Work. The WRC…

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PT Kahoindah Citragarment Tambun-Bekasi

The WRC conducted an investigation of the PT Kahoindah Citragarment Tambun-Bekasi factory, which was owned and operated by Hojeon Ltd. (Hojeon), a South Korea-based factory conglomerate.  The investigation was undertaken in response to complaints from workers received by the WRC after the factory announced its intention to close on July 2, 2018. From 2009 until…

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Rio Garment

In August 2016, Rio Garment, a collegiate supplier factory, unexpectedly closed its operations. The WRC’s investigation found that, at the time of the closure, the factory owed its workers $1.3 million in compensation.

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Hansae Vietnam

The Hansae Vietnam factory has been the subject of in-depth investigation and reporting concerning labor rights issues and engagement with Nike and Hansae on their remediation, by both the WRC and the FLA, for the past two years.

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Recent Cases in which Violations Remain Unresolved

LD El Salvador

LD El Salvador, a garment factory located in El Salvador, unexpectedly closed down operations in March 2018 and failed to pay its 824 employees approximately $2.3 million dollars in compensation that they were legally entitled to receive for terminal benefits. The factory was owned by a Korean businessman, Young Ryul Kim, and was a key…

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Konffetty S.A. de C.V.

The WRC uncovered extensive wage theft and related violations of university labor codes at Konffetty S.A. de C.V., a garment producer in El Salvador that is the sole disclosed supplier to university licensee Vive La Fete.

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PT Jaba Garmindo

Read More: WRC Assessment PT Jaba Garmindo (Indonesia) – December 18, 2015

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All Related Factory Investigations

Han Embroidery Ltd.

Read More: WRC Update: Successful Remediation at Han Embroidery (Bangladesh) – August 19, 2016 Remediation of Severance Pay Violations at Han Embroidery (Bangladesh) – April 28, 2016

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Multiwear

Multiwear, a factory located in Port-au-Prince, Haiti closed its operations on March 15, 2016. At the time of the closure, Multiwear employed approximately 2,000 workers who were represented by three independent trade union bodies. During the closure, the WRC engaged with factory management and the key buyer, HanesBrands, to ensure that workers’ legal rights were…

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I-Cheng (Cambodia) Co., Ltd.

The WRC’s assessment of I-Cheng found violations in the areas of: (1) wages and hours, including payment of a probationary wage that is below the legal minimum, and unlawful involuntary overtime; (2) gender discrimination, including an explicit policy of hiring men on contracts of shorter duration than those under which the company hires women; (3) freedom of association, including the establishment of and compelling membership in a company-controlled labor union, unlawful unauthorized deductions of union dues from workers’ wages, and the illegal retaliatory termination, in May 2014, of 243 employees who were members of an independent union; (4) statutory paid sick leave, including failure to pay such legally-required benefits to employees; and (5) occupational health and safety, including heat levels so excessive that they regularly cause employees to faint on the job.

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Industrias de Exportacion (INDEX)

The WRC conducted a general assessment of labor rights compliance at INDEX, an apparel manufacturing facility in Honduras that is owned and operated by the company Grupo Beta. At the time that the WRC undertook the investigation, the factory was disclosed as a supplier of collegiate apparel by adidas, Hanesbrands, Inc. (under the Champion and Gear for Sports brands), Knights Apparel (acquired in February 2015 by Hanesbrands), Under Armour (under the Under Armour by Gear for Sports brand), VF (under the Majestic and Jansport brands), and 289C Apparel.

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Gildan Villanueva

The WRC’s investigative work at Gildan Villanueva began after a complaint was filed by several of the factory’s employees stating that they had been fired in May 2013 in retaliation for their efforts to seek assistance from a local, non-governmental organization in order to improve working conditions at the facility. The workers alleged that supervisors openly expressed hostility towards the workers who met with the organization for their participation in protected, concerted activities, and that many of them were subsequently fired as a result of their participation in these efforts.

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PT Jaba Garmindo

Read More: WRC Assessment PT Jaba Garmindo (Indonesia) – December 18, 2015

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Manufacturas del Rio (MDR)/Central American Cutting Center (CCC)

In January 2014, MDR and a sister operation also owned by the Argus Group and housed in the same location, Central American Cutting Center (CCC), closed without providing severance pay to their 1,200 employees. The Argus Group gave workers no advance notice of the closure and made no arrangements to provide workers the US$1.8 million they were owed in terminal benefits under Salvadoran law.

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Petralex

The WRC’s initial investigation at Petralex documented systematic labor rights violations, including retaliatory firings of union leaders, who were protected from dismissal by Honduran law, as well as the firing of other workers who were supporters of the union or family members of union leaders.

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BKI, S.A.

The WRC’s assessment of BKI identified noncompliance with the Ordinance’s requirements in the following main areas: (1) wages and hours, (2) abuse, and (3) occupational health and safety.

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Canteran Apparel

The WRC report “Crackdown in Cambodia,” dated March 24, 2014, detailed deadly attacks by Cambodian security forces on protesting Cambodian garment workers.

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