Collegiate Supplier to Pay Back Wages to 80,000 Workers

February 2, 2022

Dear Colleagues,

We are writing to inform you of a major breakthrough in the WRC’s efforts to address the refusal of suppliers across a major apparel producing region of India to pay the legal minimum wage, a violation that, as we have communicated to you previously, is affecting 400,000 workers, who are collectively owed nearly $60 million. As was reported in the Guardian in December, this violation—which we believe may be the worst minimum wage violation in the recent history of the global garment industry—is affecting workers’ ability to put food on the table for their families and meet other basic needs.

For this reason, we are encouraged to report that yesterday Shahi Exports, one of India’s largest export garment manufacturers and an important supplier of collegiate goods to Columbia Sportswear, announced that it will begin paying its 80,000 workers immediately the correct minimum wage and will  provide them with full back pay for the prior underpayment, which the WRC estimates, in the case of Shahi’s workers alone, to total $10 million. Shahi has committed that roughly half this back pay will be paid to workers in the next 10 days and the remaining half with workers’ April wages.

Though these are all legal minimum wages, whose payment should have never been denied in the first place, Shahi’s commitment is a significant step forward. It will benefit workers who also produce non-collegiate apparel for many other major brands, including H&M, Levi’s, and Nike. And it is an important reaffirmation of rule of law and the need for workers to be made whole when labor laws are broken.

There are two brands that deserve credit for their energetic engagement with suppliers in Karnataka, in an effort to convince suppliers to implement the minimum wage increase and pay all arrears.  While all brands sourcing from Karnataka bear responsibility for not acting much sooner to address this sweeping wage theft, these two brands—Gap and PVH (which owns Calvin Klein and Tommy Hilfiger)—have stepped up forthrightly in recent months and their efforts have helped catalyze the progress we are now able to report.

With this important collegiate supplier committed to pay in full, the WRC will focus on ensuring that the payment goes smoothly and on convincing other suppliers in the region to follow suit. As always, please let us know if you have any questions.

Best,

Scott Nova and Ben Hensler