Case Update: Successful Back Pay Distribution at Posmi Sweaters (Bangladesh)

Distribution of a second installment of back wages due to workers at Posmi Sweaters Ltd., a sweater factory in Bangladesh that has produced university licensed apparel, was successfully completed on September 30, 2021. Posmi previously manufactured collegiate-licensed goods for the licensee, Accolade Group, and has also produced sweaters for a number of leading Western European brands, such as Primark (Ireland and UK), El Corte Inglés (Spain), and Kiabi (France). 

The September 30 payment was the result of continuing engagement by the WRC with Posmi following on an investigation by the WRC in 2019 and 2020 of the company’s practices involving underpayment of a group of 91 employees for overtime work performed between 2017 and 2019. In October 2019, Posmi Sweaters signed a memorandum of understanding (MOU) with the WRC to provide back pay to the 91 affected employees to remedy this prior noncompliance with relevant university and buyer codes of conduct and applicable Bangladeshi law. 

In November 2020 Posmi paid an average of $650 each in back pay (the equivalent of more than 12 months’ 2017–2019 wages) to the 38 out of the 91 affected workers who were still working at the factory.

The September 30, 2021, distribution (see photo below) provided back pay to an additional 15 affected workers who are no longer employed at the factory, with each worker receiving an average of $480 (worth nearly eight months’ wages at 2017–2019 levels).

Posmi Sweaters’ management made the September 30 payments to the 15 workers based on calculations approved by the WRC in a distribution that was coordinated and monitored by a WRC representative. The remaining 38 workers who have not yet been paid their arrears are no longer in Posmi Sweaters’ employ but will receive their funds in a later installment. The WRC will continue to monitor this case closely to ensure Posmi Sweaters completes implementation of the 2019 MOU.

This case demonstrates the steep obstacles that exist in the garment industry to ensuring that factory employees simply receive the wages they are legally owed on a consistent basis—obstacles that have been only exacerbated by the economic disruption resulting from the Covid-19 pandemic. The WRC is committed to overcoming these obstacles and making sure that, no matter how long it takes, remediation is achieved and workers receive the pay that the law and university codes of conduct affirm they are due.

In the case of Posmi Sweaters, one such obstacle, in particular, has been the lack of consistent support for the remediation process from the factory’s buyers. The WRC is urging the factory’s current and recent buyers to encourage and require Posmi Sweaters, through their orders, to complete the implementation of the remedial commitments it has made.

As always, please contact us if you have any questions.