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H&M Accused of Failing on Pledge to Ensure Fair Factory Wages

Less than three months since Swedish retailer H&M announced a new wage-management system to improve work environments and fairer wages at 500 supplier factories worldwide, the company this week was accused of failing to meet a commitment it made five years ago to ensure the workers producing its garments are paid a so-called living wage.

In 2013, H&M pledged to work with its suppliers to make sure the estimated 850,000 textile workers in its factories would be earning a fair living wage by 2018. According to workers rights groups, however, H&M—the world’s second-largest fashion retailer after Zara owner Inditex—has fallen short on that promise.

“With H&M’s deadline nearing, Clean Clothes Campaign set out to check what workers were making in some of those supplier factories, and how close that was to a living wage,” said the Clean Clothes Campaign (CCC), an alliance of labor unions and charities, on its campaign website where it published its findings this week revealing “that many workers making H&M’s clothes live below the poverty line—despite H&M’s promise of a living wage by 2018, and despite the brand’s recent deceptive claims of progress.”

A fair living wage, as defined by CCC, is the amount that should be earned to “allow the garment worker and her/his family to cover basic needs: food to meet nutritional needs, housing, healthcare, clothing, transportation and education, plus 10 percent discretionary income for savings, or protection in case of the unexpected.”

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According to CCC, “workers in India and Turkey earn about a third and in Cambodia less than one-half of the estimated living wage. In Bulgaria, interviewed workers’ salary at H&M’s ‘gold supplier’ is not even 10 percent of what would be required for workers and their families to have decent lives.”

CCC said its research, based on interviews with 62 workers in Bulgaria, Turkey, India and Cambodia between March and June 2018, revealed workers are earning below living wage to cover their families’ basic needs and many are working overtime beyond legal limits without proper pay.

“We knew that H&M had not met its commitment by the beginning of this year, but some of the concrete findings about wages and related working conditions in H&M supplier factories still came as a shock. H&M needs to take action immediately to stop the scandal of poverty wages and workers’ rights violations,” said CCC’s Bettina Musiolek, who coordinated the research.

In response, H&M said its strategy to ensure fair living wages has reached 600 factories and 930,000 garment workers, according to Reuters. “There is no universally agreed level for living wages, and wage levels should be defined and set by parties on the labor market through fair negotiations between employers and workers representatives, not by Western brands,” H&M said in a statement.

“The wages are so low that we have to work overtime just to cover our basic needs,” said a worker at an H&M “gold supplier” factory in India, according to CCC. “Overtime hours in three out of the six researched factories often exceed the legal maximum and working on Sundays is frequent in all four countries included in the research.”

In a tweet Tuesday, CCC said, “NONE of the interviewed workers in an @hm supplier factory in #Bulgaria earns the legal minimum wage in normal working hours.”

Per published reports, H&M responded saying all of its suppliers must sign the company’s sustainability commitment, which “requires suppliers to pay their employees at least the minimum wage, that overtime hours are within legal limits and correctly compensated, and that they follow national law. We regularly follow up on our requirements and if we find any violations we take action. If the supplier does not make necessary improvements, we ultimately end the business relationship. The claims in the report that a number of supplier factories producing for H&M group do not pay minimum wages have not been confirmed by our comprehensive audits and assessment programs ensuring factories live up to our minimum requirements.”

In a statement to Reuters, U.S.-based International Labor Rights Forum (ILRF) executive director Judy Gearhart was not convinced: “Instead of empty public relations talk, we want to see transparent changes in the real wages of workers in H&M’s supply chain.”