Update: Mass Wage Theft in India

January 13, 2022

Dear Colleagues,

As we reported to you in October and December, the WRC is working to address the refusal of suppliers across a major apparel producing region of India to pay the legal minimum wage—including an important supplier of collegiate goods to Columbia Sportswear. Roughly 400,000 workers are affected. As of today, the workers are collectively owed more than $56 million.

Just before the holiday, The Guardian ran an important story on this crisis, which is well worth reading if you have time.

On the positive side, in response to communications from the WRC, most major brands and retailers sourcing from the affected region (the state of Karnataka) have now taken the position that suppliers must pay the proper minimum wage and all arrears. This includes Columbia Sportswear. This is a huge shift from where many brands stood when the WRC’s outreach began: at that time, they were accepting a convoluted and baseless legal argument suppliers have employed to defend their refusal to obey the law. Brands have now properly rejected this argument and are calling on suppliers to correct the violations and pay workers.

The problem is that the suppliers still have not paid. Ultimately, suppliers will pay when, and only when, brands make it clear that failing to do so—and thereby continuing to brazenly violate the brands’ own labor standards—will bring serious commercial consequences. The WRC is urging brands to use their leverage to ensure that suppliers come into compliance with the law, including prompt payment of all arrears.

We are certain Columbia Sportswear and the other brands involved—which include many of the industry’s biggest players, from Walmart to Zara—possess sufficient leverage to resolve the problem. As public scrutiny of the crisis grows, these brands have more incentive to use that leverage. We are, therefore, cautiously optimistic that this mass wage theft—the worst the WRC has ever documented—will be brought to an end.

We will keep you updated. As always, please let us know if you have any questions.

Best,

Scott