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19 Jan 2022

American Apparel & Footwear Association

American Apparel & Footwear Association urges Indian Clothing Manufacturers Association members to pay VDA increase & arrears in Karnataka

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SUBJECT: Buyer Expectation on Payment of Dearness Allowance in Karnataka State

On behalf of the American Apparel & Footwear Association (AAFA), I am writing to urge your members to immediately pay their workers in Karnataka State the legally mandated increases in the Variable Dearness Allowance (VDA) that were implemented in both April 2020 and March 2021. Further, our members expect any arrears owed to workers to be paid in full in a timely manner, but no later than March 2022.

Representing more than 1,000 world famous name brands, AAFA is the trusted public policy and political voice of the apparel and footwear industry...

While we understand that a case on this issue remains pending before the Honourable High Court of Karnataka, legal experts agree that prior decisions by the High Court make clear that the increases in the dearness allowance are legally owed to workers. According to our calculation and understanding, based on the minimum wage increase for the period from April 1, 2021 to March 31, 2022... a garment worker’s legal minimum wage should include Basic Pay and Dearness Allowance of 40.02 Rs per day (1040.40 Rs per month) from April 1, 2021.

The ongoing uncertainty created by repeated delays in the High Court case and suppliers’ steadfast refusal to pay the legally mandated dearness allowance, and all arrears owed, has not only put the reputation of our members at great risk but has begun to undermine our industry’s long-standing... sourcing relationship with... Karnataka. In turn, the unending delays and continuing intransigence threaten the very economic livelihoods of thousands of garment workers in Karnataka State...