Report: Pandemic-Era Severance Theft at Garment Factories Exceeds Half a Billion Dollars

WRC Finds Violations in Supply Chains of Gap, Next, Walmart, and More
Fashion Brands Urged to Form Severance Guarantee Fund to Pay Fired Workers’ Stolen Earnings

Tens of thousands of garment workers at factories producing for leading fashion brands, who were fired during the Covid-19 pandemic, are being denied terminal compensation, in violation of the law and the labor rights obligations of the brands and retailers whose clothes they sewed. New research by the Worker Rights Consortium (WRC) exposes severance pay theft at dozens of factories, all named in the report, where workers were robbed of an average of more than a thousand dollars (US) per person.

The WRC’s data represent a modest fraction of the factory closures in the industry, indicating that the severance theft the report reveals is the tip of the iceberg. The WRC estimates that the millions of garment workers terminated globally during the pandemic have been robbed of more than half a billion dollars in earnings since the pandemic’s outset.

Scott Nova, Executive Director of the WRC, said: “In this pandemic, unemployed workers desperately need a safety net. Garment workers’ safety net is their legally mandated severance. When brands stand by while suppliers steal that money, the consequences for workers and their families are devastating.”

Published today, Fired, Then Robbed: Fashion Brands’ Complicity in Wage Theft during Covid-19:

  • Identifies and names 31 factories that deprived 37,637 workers of an estimated $39.8 million in legally mandated compensation in the supply chains of leading brands and retailers, including adidas, Amazon, Gap, Next, Nike, Target, Walmart, and Zara.
  • Estimates—across a total of 400 factory closures/mass dismissals identified by the WRC—that 160,000 workers have lost $171.5 million to severance theft in the past 12 months.
  • Projects that total severance theft in the global garment industry during the Covid-19 pandemic is between $500 million and $850 million.

Last month a coalition of 220 rights organizations called on brands and retailers to sign a binding agreement with unions to establish a global Severance Guarantee Fund. The Fund would bring an end to severance theft in the apparel industry. The cost to brands would be less than 10 cents on a typical t-shirt.

“Some garment workers have waited an entire year for their severance and can’t feed their children. Each month more factories are closing and leaving workers with nothing,” said Liana Foxvog, Crisis Response Director at the WRC and primary author of the report. “The long-term problem of repeated severance theft in the garment industry has reached a brutal crescendo during Covid-19. The Severance Guarantee Fund is the only way to hold employers and brands accountable and ensure that fired garment workers are no longer robbed of the severance they have legally earned.”


Article in The New York Times about the report.

For a list of 220+ rights organizations calling on apparel brands and retailers to sign the Severance Guarantee Fund, see: