India: Brands & retailers respond to 'worst wage theft' documented in garment industry in Karnataka, India
In December 2021, it was reported that more than 400,000 garment workers in Karnataka, India, had been receiving wages below the legal minimum at more than 1,000 factories since April 2020. Since the "variable dearness allowance" (VDA) was increased to 417 Indian rupees (US$5.60) a month, labour groups estimate the total amount of unpaid wages to be more than US$50m and claim it is the 'worst wage theft' ever documented in the global garment industry. Worker Rights Consortium have launched a page showing the mounting money owed to workers here, and are calling on brands sourcing garments from Karnataka to intervene to ensure their suppliers pay workers' wages in accordance with Indian law. Workers owed wages say they are unable to cover basic living costs, such as food, rent and schooling for their children.
Garment suppliers paying less than the legal minimum have argued that the Ministry of Labour & Employment issued a proclamation suspending the minimum wage increase shortly after it was implemented in April 2020, and that a legal complaint relating to the requirement to pay the increase is still progressing through the courts in Karnataka. However, in September 2021, the Karnataka high court ruled that the minimum wage, including all arrears, must be paid to workers regardless of any other court proceedings.
In January 2022, Business & Human Rights Resource Centre (BHRRC) invited 22 brands and retailers sourcing garments from Karnataka to respond and outline steps they have taken to: 1) identify which of their suppliers in Karnataka have been paying workers below the legal minimum; 2) ensure affected workers are paid back wages; and 3) ensure workers are paid the new minimum wage going forward. All twenty-two brands have now responded: Abercrombie & Fitch, adidas, American Eagle, ASOS, Benetton Group, C&A, Columbia Sportswear, Gap, H&M, Inditex, Levi Strauss & Co., Marks & Spencer, Next, Nike, Primark, Puma, PVH, Target, Tesco, UNIQLO, VF Corporation and Walmart. The brand responses are linked in full below.
All 22 brands have policy commitments that ensure workers in their supply chain are paid in full. Yet, only 16 respondents outlined steps they are taking to ensure affected workers are paid back wages and only 5 brands (Abercrombie & Fitch, ASOS, Inditex, Marks & Spencer and Next) indicated that affected workers in their supply chain had started to receive some of the wages owed to them.
BHRRC then invited major garment producers in Karnataka to respond. Shahi Exports and Raymond Ltd confirmed they will pay all VDA arrears to workers: Shahi said the first instalment will be paid in February, with the remainder paid in May (with April wages); Raymond said payments would start in March. Laguna Clothing also responded and said they were working out the details for repayments. The full responses are included below. Arvind Ltd, Bombay Rayon Fashions, Gokaldas Exports, Texport Industries and Texport Syndicate did not respond.
Worker Rights Consortium is tracking which manufacturers have committed to pay workers their back wages. In March 2022, BHRRC invited buyers of Go Go International and AKR Industries - who are listed as paying back wages on a very late schedule - to respond. ASDA, Bestseller and OVS responded and their responses are linked below. Ann Taylor, Tom Tailor and Desigual did not respond.
In March 2022, VF Corporation and Matalan provided updated statements.
In July 2022, Worker Rights Consortium confirmed an estimated $23.1 million had been paid to nearly 200,000 current workers employed by 21 manufacturers in Karnataka, with 16 of the manufacturers having paid in full. According to Worker Rights Consortium, Raymond, Silver Spark, Shell Apparels, and Go Go International had not yet finished paying the arrears to its current employees, while Worker Rights Consortium could not confirm the status of payments made by Creative Group. Worker Rights Consortium urged the five producers to swiftly complete the payments.
BHRRC will continue to monitor the evolving situation and update this page as we receive further information.