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 $24 million in legally owed severance to more than 11,000 former employees of shuttered factories around the world.

Recent Cases in which Violations Were Fully Resolved

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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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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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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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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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

PT Jaba Garmindo (“Jaba Garmindo”), an Indonesian garment manufacturer entered bankruptcy in April 2015 without having paid legally required severance benefits and final wages to its roughly 4,000 employees. The WRC is urging UNIQLO, H&M, s.Oliver, Jack Wolfskin, and the other brands and retailers that produced at Jaba Garmindo to ensure that the workers who…

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All Related Factory Investigations

Chong Won Fashion, Inc. (C. Woo Inc.)

In response to a worker complaint, the WRC launched an investigation into alleged labor rights violations at Chong Won in late October, 2006. The investigation found serious and ongoing labor rights violations at Chong Won, including minimum wage violations, forced overtime, violations of workers’ right to unionize and bargain collectively, and, of particular concern, collusion by factory management with government agents in violence against workers engaged in a lawful and peaceful strike.

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BJ&B

Labor rights concerns at BJ&B were first publicized by student anti-sweatshop activists in 1998 when workers from the factory visited college campuses as part of the students’ effort to promote the adoption of university codes of conduct. In late 2001, the WRC received a complaint from workers at BJ&B alleging that they had been fired in retaliation for their efforts to form a trade union at the factory. The WRC found that the dismissals had in fact been unlawful and contacted licensees in early 2002.

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Rising Sun Kenya EPZ

The WRC’s investigation of Rising Sun documented a number of serious code of conduct violations including, of greatest concern, the mass firing of 1,270 workers in early June 2006 in response to protests by workers regarding working conditions at the factory.

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Hermosa and Chi Fung

Hermosa Manufacturing closed abruptly in May 2005 without paying workers substantial amounts of legally mandated compensation. In addition, workers who engaged in efforts to protest Hermosa’s practices and secure their compensation were blacklisted by other apparel factories in the region; the WRC documented such blacklisting by a factory known as Chi Fung, another supplier of university logo goods in Apopa, El Salvador.

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Sinolink Garment Manufacturing

The WRC launched an emergency assessment of Sinolink in response to a worker complaint in August, 2004. The investigation found serious violations of worker rights in the following areas: freedom of association, including collusion with state police to violently squelch lawful associational activities; health and safety, including workers being locked in the factory overnight without access to first aid supplies; verbal and physical harassment and abuse; inappropriate use of casual employment status; forced and improperly compensated overtime, including forced 24-hour shifts; and access to sick leave and maternity leave.

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First Apparel

The assessment was initiated in response to multiple complaints made by employees of these facilities, primarily concerning the areas of freedom of association and occupational health and safety.

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Lian Thai

The WRC undertook an Assessment of Lian Thai in response to a complaint from workers alleging a range of code of conduct violations, primarily in the areas of collective bargaining, the provision of benefits, homework, and occupational health and safety.

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Gildan El Progreso S.A. (Gildan Activewear)

In January 2004, the WRC received a complaint from the Maquila Solidarity Network (a Canadian non-governmental organization) supported by the Federación Independiente de Trabajadores Hondureños (FITH, Independent Federation of Honduran Workers) and Canadian Labour Congress, on behalf of a group of workers alleging labor rights violations at Gildan El Progreso.

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Double Star

The WRC has been working since November 2003 to correct code of conduct violations at the Double Star factory in Thailand. The WRC assessment identified serious code of conduct violations pertaining to freedom of association, wages, hours of work, and occupational health and safety.

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Istmo

The primary issue of concern at the factory has been violations of workers’ associational rights, including illegal firings of trade union members and threats against union supporters. Additional violations that have been uncovered in the course of the WRC’s work at the factory include forced overtime, discrimination against pregnant workers, and failure to pay workers on time and other payroll irregularities that have the effect of denying workers full payment for hours worked, among other issues. We are pleased to report that there has been very significant progress in addressing these issues, thanks in large part to efforts by Gap.

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