Biggest wage theft ever seen in fashion: Workers for brands like Zara, H&M and Nike kept from over 41mln pounds in wages

Over 400.000 garment workers in Karnataka, India have not been receiving their full wage since April 2020. The garment workers make clothes for major international brands like Zara, H&M and Nike, but despite the companies all having “strict code of conducts”, the suppliers they work for failed to give them their full wage.

 

The dispute on VDA

The Indian government corrects the minimum wage with a “variable dearness allowance”(VDA). This allowance ensures that if the annual cost of living increases, the minimum wage will increase accordingly. In April 2020, the VDA was increased with 418 Indian rupees. However, the Ministry of Labour & Employment suspended the increase shortly after. Even though the Karnataka high court ordered this move by the Ministry illegal in September, ruling that the minimum wage and the VDA must be paid to workers regardless of any other court decisions. The garment suppliers, however, still claim they don’t have to pay the VDA as their legal complaint is still progressing through the courts in Karnataka.

 

The implications of not paying the VDA

Facing increasing costs of living, the consequences of the garment suppliers’ refusal to pay the VDA has severe implications. As one garment worker put it: “If we had got the wage increase last year, we could have at least eaten vegetables a few times a month. Throughout this year I have only fed my family rice and chutney sauce”. Trying to convince managers to talk about the matter, management replied with: “this is what we pay to work here. If you don’t like it, you can leave”.

 

The amount

According to the Worker Rights Consortium (WRC) the total amount of unpaid wages adds up to over 41 million pounds, stating it’s the biggest wage theft ever seen in the fashion industry. Karnataka is one of India’s main garment-industry hubs, with thousands of factories producing clothing for major brands like Nike, Zara and H&M. Despite WRC pushing on the matter for the past years, none of the brands had intervened or ensured that workers would get paid according to the law.

As Scott Nova from WRC puts it: “It has been almost two years since apparel suppliers have been refusing to pay the legal minimum wage and brands have been letting this continue when they know they are the only ones with the power to stop this widespread wage theft”.

Read more about this at The Guardian.

 

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