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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

Nike’s withdrawal of orders led to the closure of PT Kahoindah Bekasi, without full payment of severance. After the WRC uncovered the problem, the employer signed an agreement with the WRC committing to pay the workers in full—a total of $4.5 million.

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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

Industrias Sinteticas (INSINCA)

The WRC’s assessment at INSINCA found violations in the areas of wages and hours, statutory paid leave, freedom of association and occupational health and safety.

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PT Kizone

The owner of PT Kizone fled Indonesia in Janaury 2011 without paying workers $3.3 million in legally mandated severance. More than 2,800 workers were affected.

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Global Manufacturers & Contractors

Since 2011, the International Labor Organization and International Finance Corporation’s Better Work Haiti factory monitoring program has consistently reported overwhelming noncompliance by Haitian export garment factories with the country’s legal minimum wage. A report from Better Work Haiti in April 2013 indicated that every one of the country’s export garment factories was violating the law.

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One World Apparel

Since 2011, the International Labor Organization and International Finance Corporation’s Better Work Haiti factory monitoring program has consistently reported overwhelming noncompliance by Haitian export garment factories with the country’s legal minimum wage. A report from Better Work Haiti in April 2013 indicated that every one of the country’s export garment factories was violating the law.

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Hawkins Apparel

At the time that Hawkins Apparel closed its doors, it owed non-managerial employees approximately $300,000 in legally-mandated compensation.

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F&D, S.A. de C.V.

In 2009-2010, the WRC was contacted by F&D workers who had recently formed a union affiliated to the SITS, a multi-factory union. The WRC documented serious violations of workers’ freedom of association at the facility. These included coercion, threats, harassment, and bribery of workers to induce them to resign from the SITS union, the formation of a company-sponsored union, and other acts of discrimination against the SITS union and those employees who were its members.

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Caracol Industrial Park

Since 2011, the International Labor Organization and International Finance Corporation’s Better Work Haiti factory monitoring program has consistently reported overwhelming noncompliance by Haitian export garment factories with the country’s legal minimum wage. A report from Better Work Haiti in April 2013 indicated that every one of the country’s export garment factories was violating the law.

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Genesis, S.A.

In December 2011 and January 2012, four union leaders who had been illegally fired by t-shirt factory Genesis, S.A. were reinstated at the urging of the factory’s main customer, Gildan.

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ITIC Apparel

The WRC’s investigation found that ITIC Apparel violates the Sweatfree Contracting Ordinance’s requirements in the areas of wages and hours, freedom of association, harassment and abuse (including sexual harassment), legally mandated benefits, and occupational health and safety.

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C.J.’s Seafood

After conducting interviews with workers, the WRC found grave and systematic abuses of the rights of this highly vulnerable workforce, including grossly excessive hours of work, severe and constant harassment and psychological abuse, wages far below the legal minimum, oppressive living conditions, discrimination based on national origin, and threats of violence aimed at preventing workers from reporting these abuses to regulatory and law enforcement agencies.

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