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9 Feb 2022

Emma Ockerman, VICE

India: Brands leaving unpaid wages ‘unchecked’ for nearly two years demonstrates ‘thinness’ of wage commitments, according to labour orgs.

"Zara, Nike, and Abercrombie’s Indian Factories Weren’t Fully Paying Workers", 9 February 2022


In total, more than 1,000 clothing factories in the southern Indian state of Karnataka...failed to give their laborers a legal monthly minimum wage increase of 417.60 rupees—or about $5.60...The modest pay hike, which went into effect in April 2020, would have helped approximately 400,000 workers, mostly women, cover day-to-day living costs like housing and food....

...many of the companies only publicly responded to the crisis in the last month or so—and major suppliers have only just started to commit to repayment in the past several days.

“Brands are basically happy to look the other way when hundreds of thousands of the workers who make their products are being denied wages that they need for daily survival,” Hensler said. “To allow that to go on unchecked for months—nearly two years—until the brands are called publicly to account for it—I think it says a lot about the thinness of the commitments that they claim to have for the welfare of the workers.” ...

...the Business & Human Rights Resource Centre...also started publicly reaching out to 22 companies that sourced clothing from Karnataka and worked with factories accused of wage theft...Companies mostly offered vague responses that they expected their suppliers to comply with local wage laws and brands’ codes of conduct, without specifically detailing concrete steps to see that workers were repaid.

Walmart, for example, responded that it would reach out to manufacturers to “reinforce” expectations. Levi Strauss said it was following up with each supplier individually, with the goal of getting them to make back payments as soon as possible. Nike promised it was “monitoring” the situation.

...Only five brands indicated that workers in their supply chain had started to receive some of their due wages...

On Feb. 1, Shahi Exports...announced it would pay back wages, as well as the proper rate moving forward. Shahi Exports... denied in a letter to Business & Human Rights Resource Centre researchers that it had been non-compliant or opposed to minimum wage laws, and said that the industry had been waiting for legal proceedings to conclude.

Some brands have also been better at addressing the situation than others, according to Hensler. Gap and PVH, the owner of Tommy Hilfiger and Calvin Klein, were persistent in recent efforts to make Shahi pay workers back some $10 million, Hensler said—with roughly half of that money coming down to laborers by Feb. 10...

...a spokesperson for PVH said the company “continues to be in extensive dialogue with all relevant parties, including civil society NGOs, labor rights organizations, and our suppliers in the region to bring a resolution to this important issue while it remains under legal review.” 

A spokesperson for Gap said the company had established a timeline with its suppliers “by which we expect full compliance” with the proper legal wages and back pay. 

Abercrombie & Fitch... told the Business & Human Rights Resource Centre that its vendor confirmed it would start payments of the 2020 wage increase in January.

... H&M also told the Business & Human Rights Resource Centre it had “made it clear to our suppliers in Karnataka that they must pay the workers legally mandated minimum wages, including all arrears,” or face “serious consequences.”

Zara said in a statement to VICE News that “almost all” of the eight factories it worked with in Karnataka had paid or committed to paying workers the 2020 pay increase.

The company didn’t respond when asked to identify the factories.