[El Salvador] Call for fashion brands to address severance ‘wage theft’

A US designer and manufacturer is under increasing pressure to respond to the failure of a now-shuttered factory in El Salvador to pay its workers millions in wages, benefits and terminal compensation, HRD reports.

Style Avenue manufactured apparel co-branded with Disney, the National Basketball Association and the National Football League, until the plant's closure in May 2023. US firm Outerstuff was the El Salvador factory’s primary buyer.

In December 2023, a review from the Worker Rights Consortium (WRC) reportedly revealed the factory’s failure to pay its 244 workers approximately $1.8 million in wages, benefits and terminal compensation.

According to the review, Outerstuff had a responsibility under the university licensing standards to "ensure that the factory complied with Salvadoran law, including the payment to workers of their legally due compensation at the time their employment ended."

Outerstuff initially denied responsibility over the claim, stating that Style Avenue was no longer its supplier when it shuttered in May 2023.

But, in a statement to The Guardian, Outerstuff now says it is working on a plan to pay nearly $1 million to Style Avenue workers.

In its statement, the company told The Guardian, "At this time, despite our strong feeling that we have met all licence requirements, Outerstuff is nonetheless working on a structured plan that will provide nearly $1m in finances to the workers as soon as possible."

In addition, Outerstuff said that it takes worker rights "very seriously," and is managing a structured and global compliance programme that requires a code of conduct for all its suppliers.

However, this is only one of the major severance 'wage theft' issues the global fashion industry is facing, according to the WRC (via The Guardian report).

The WRC revealed that over £4bn in wages have been withheld from millions of garment workers for western clothing brands over the past 15 years.

Scott Nova - executive director at the WRC - told The Guardian that denied severance is a "hidden crime" in the industry, where many employers are left with "devastating consequences."

Mr Nova added that apparel brands have been aware of the issue for years yet have done nothing to stop it.

"Their voluntary labour standards have allowed them to ignore the problem with impunity," Mr Nova said, according to Guardian reporting.

Source: HRD

(LInks and quotes via original reporting)

A US designer and manufacturer is under increasing pressure to respond to the failure of a now-shuttered factory in El Salvador to pay its workers millions in wages, benefits and terminal compensation, HRD reports.

Style Avenue manufactured apparel co-branded with Disney, the National Basketball Association and the National Football League, until the plant's closure in May 2023. US firm Outerstuff was the El Salvador factory’s primary buyer.

In December 2023, a review from the Worker Rights Consortium (WRC) reportedly revealed the factory’s failure to pay its 244 workers approximately $1.8 million in wages, benefits and terminal compensation.

According to the review, Outerstuff had a responsibility under the university licensing standards to "ensure that the factory complied with Salvadoran law, including the payment to workers of their legally due compensation at the time their employment ended."

Outerstuff initially denied responsibility over the claim, stating that Style Avenue was no longer its supplier when it shuttered in May 2023.

But, in a statement to The Guardian, Outerstuff now says it is working on a plan to pay nearly $1 million to Style Avenue workers.

In its statement, the company told The Guardian, "At this time, despite our strong feeling that we have met all licence requirements, Outerstuff is nonetheless working on a structured plan that will provide nearly $1m in finances to the workers as soon as possible."

In addition, Outerstuff said that it takes worker rights "very seriously," and is managing a structured and global compliance programme that requires a code of conduct for all its suppliers.

However, this is only one of the major severance 'wage theft' issues the global fashion industry is facing, according to the WRC (via The Guardian report).

The WRC revealed that over £4bn in wages have been withheld from millions of garment workers for western clothing brands over the past 15 years.

Scott Nova - executive director at the WRC - told The Guardian that denied severance is a "hidden crime" in the industry, where many employers are left with "devastating consequences."

Mr Nova added that apparel brands have been aware of the issue for years yet have done nothing to stop it.

"Their voluntary labour standards have allowed them to ignore the problem with impunity," Mr Nova said, according to Guardian reporting.

Source: HRD

(LInks and quotes via original reporting)