The Global Impact of Delayed Payments and Factory Closures for Garment Makers

Across the globe, millions of garment workers within fashion’s supply chain are facing grim financial uncertainty as a result of delayed payments from brands. While some brands have agreed to #PayUp, others, including Primark, Arcadia Group, Gap, and Bestseller, have refused to pay for all of their post-pandemic cancelled orders in a timely manner — if they pay for them at all. The repercussions of these brands’ actions are devastating, with garment workers left food and housing insecure around the world.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) website shares that 1,150 factories in Bangladesh (second only to China for garment exports) have reported more than $3 billion in cancelled or suspended orders, which impacts more than two million garment workers. While some payments have been trickling in to suppliers, Nazma Akter with the Awaj Foundation states that while more than 70 percent of workers have been paid, many still remain impacted by delays in brand payments. While the issue of delayed brand payments represents a significant concern for workers in Bangladesh and other parts of Southeast Asia, garment workers in Central America and Haiti are also grappling with financial repercussions caused by factory shutdowns. If workers don’t receive timely wage payments during factory shutdowns, they will have no financial means to pay for shelter, clothing, or food. The common human thread uniting garment makers across the globe — the struggle for survival.

Here’s what we know is happening in North America, Central America, and Asia.

Impact of Covid-19 on Garment Makers Globally

Haitian women with their children.

North America — Haiti & Los Angeles 


Better Work Haiti reports that nearly 57,388 garment workers are employed in 41 Haitian factories that produce for 25 brands/retailers. Like most countries, the threat of Covid-19 has impacted factory production leaving many workers without a source of income.

“Most workers are basically out of work,” says Jennifer Bognar, Solidarity Center program officer for the Americas region. “Or they are working in pretty poor conditions.” Those who are still working are only doing so on a part-time basis, about three times a week, according to Bognar. However, FEMA, as well as some brands that source in Haiti, are utilizing Haitian factories to produce PPE.

FEMA is sourcing its N-95 masks in North Carolina and Haiti,” Bognar says. “Workers are reporting that their factories are producing medical masks and gowns for the American market, through companies such as Culp Furniture, Superior Uniform Group and VALD’OR. Others are making t-shirts, as usual, for the American market for Champion, Reebok, Walmart, and Old Navy.”

Before the coronavirus pandemic took over news cycles, low wages were already impacting the livelihoods of Haitian garment workers. Solidarity Center’s Carolyn Butler wrote that the daily minimum wage for export apparel workers in Haiti is 420 gourdes (about $5.07), over four times less than the estimated cost of living. 

As the pandemic became a threat to public health, however, late and low wages became coupled with the risk of illness. Solidarity Center reported that at least one factory asked workers to shelter that risk. Tula Connell, with Solidarity Center, posted a document that workers were allegedly asked to sign. The document held workers “legally responsible for their illness.” According to Connell, workers and their unions also reported that makers were being required to sign documents stating that “they will take precautionary measures while at work” and agreeing that if they get sick, the company is not legally responsible for their illness.

Currently, unions are still negotiating for workers to receive a living wage. According to Solidarity Center, five unions are asking brands to help shoulder the payment burden with the government while factories remain closed.

Los Angeles

In the United States, Los Angeles serves as an epicenter for the garment workforce with factories in L.A. employing 45,000 workers. Annie Shaw, outreach coordinator for Garment Workers Center in Los Angeles, said that approximately 60 percent are women, and many are undocumented.

Before Covid-19, Shaw shared that workers were earning about $5 an hour — one-third of the minimum wage in Los Angeles, which is currently $14.25. Some factories also pay a ‘piece rate,’ or a price per piece. “Piece rate pay is as low as 2 cents for Los Angeles garment workers which makes it impossible to keep up with the cost of basic needs like rent and healthy food. Garment workers earn an average of $6 per hour due to the piece rate, when they should be making $13.25 or $14.25 depending on the size of the factory,” said Daisy Gonzalez, Lead Member Organizer for GWC. “And though they typically work 10-11 hour days, and up to 14 hours, they are routinely denied overtime wages.”

As factories closed because of shelter-in-place mandates, Shaw shared that 70 percent of L.A. garment workers lost their jobs and that the majority were women of color, many of whom had children or were elderly. “They get less hours, less pay, and they get fired more quickly,” Shaw said of this vulnerable workforce population.

As in Haiti, some workers were back in factories helping to create PPE. However, the safety of workers isn’t a given while they sew the masks and other equipment that will protect others from harm. “We have very little info on the health and safety of workers,” Shaw said. Low wages plague PPE production, too. The piece rate pay even applies to masks and gowns. “Many California garment workers are sewing face masks and medical gowns right now for as low as 5 cents a mask,” Gonzalez said. “Piece rate pay and the pressure to meet quotas disincentivizes workers taking time to wash their hands or disinfect their stations.”

In Los Angeles, many brands also have yet to pay factories, and unpaid invoices mean that workers also can’t receive wage payments. Shaw said that brands that need to PayUp include Fashion Nova and Ross. “If they don’t even pay up to manufacturers, workers won’t get anything,” Shaw said. For unpaid workers, the situation is dire. A lack of income means that there is no way to pay for rent or food.

“Workers are risking their lives to work somewhere so they can pay rent this month,” Shaw said. Currently, the GWC has raised nearly $38,000 through a direct relief fund to help workers. The state of California also is offering some aid that could benefit L.A.’s garment worker population. While undocumented workers were not eligible to receive federal stimulus money from the CARES Act, California’s $75 million Disaster Relief Fund includes some aid for  150,000 undocumented workers in the state. However, the fund will not be enough to provide support to all workers, since, as Shaw noted, there are close to two million undocumented workers in California. The fund will provide up to $1,000 per household ($500 per adult; the aid is a one-time payment).

“For the Governor’s fund, you have to apply,” said Shaw, who also noted that the process won’t be quick and that, ultimately, “someone will be left behind.” The Garment Workers Center also is currently backing SB 1399; if passed, the bill would help put an end to wage theft and ensure garment workers receive a fair minimum wage. For now, the GWC is hoping that brands with outstanding orders and invoices will #PayUp so garment workers in L.A. receive the money that they’ve already labored for.

Impact of Covid-19 on Garment Makers
Maquilas in Central America.

Central America — Honduras, El Salvador, Guatemala


In March, Remake reported that trade unions and human rights organizations were expressing concern regarding how maquila workers in Honduras would stay afloat as factories closed in response to the coronavirus pandemic. More than 20 unions from the FESITRATEMASH CGT and FITH federations, representing approximately close to 50,000 workers (25,000 of which are direct affiliates), negotiated jointly with the Apparel Employers Association to receive two weeks paid time off. However, many were worried about how they would survive when money ran out and factories remained closed. (The two weeks of paid time off expired on Friday, March, 27th.) The fear—at that time—was that workers would have to ‘draw down’ vacation time in order to receive payments from factories while the shutdowns continued.

Of the 96,000 maquila workers employed in the garment sector, at one point 66,000 had been suspended because of factory shutdowns during the pandemic. As of late May, 12,853 have gone back to work making PPE. Alexis De Simone Pereira, Senior Program Officer at the Americas Region for Solidarity Center, confirmed that apparel worker unions negotiated for workers to use vacation time as a means to ensure that they remained paid during the shutdown.

The Honduran government also passed a relief law that companies could voluntarily participate in to provide payments to workers, according to Stephen Wishart, Central America Director for Solidarity Center. The law provides 6000 lempiras to workers a month—or about $250—and companies and the government both contribute to these payments. Wishart explained that the Honduran government provides $150 a month to the workers and the company contributes $100.

All contributions go through the Maquila Association in Honduras, which is responsible for distributing the funds to the factories so they can pay their workers. Hanes, VF, Fruit of the Loom, Gildan and Delta Apparel all own factories in Honduras and are participating in the program. 

Since the relief law is completely voluntary, though, companies don’t have to provide these funds if they elect not to participate. And while the relief law is providing some financial relief to workers, the monthly payment may fall short of what many need for survival. “It’s about $100 less than minimum wage,” Wishart said. “Workers are not getting a living wage or even the minimum wage, but they are getting what amounts to $250 a month.”

VF is contributing more than the amount required for the program. Wishart said that the company elected to increase its contribution to $200 so that workers receive the Honduran minimum wage (or $350 a month). The company operates two factories in Honduras—one produces for the Dickies brand, the other produces for the company’s Red Cap brand. While the additional funds may provide more relief for workers, Wishart noted that the Honduran minimum wage isn’t actually ‘living wage’ for workers. It’s also worth noting that 25,000 maquila workers have collective bargaining coverage and were making more than minimum wage prior to the pandemic.

Numerous other brands outsource production to factories in Honduras. This means that the factory owners—not the brands—would elect whether or not to participate in the government relief law. While there has been speculation about brands delaying payments to factories in Central America, Wishart emphasized that reports of brands not paying factories for orders have not been confirmed. “In Central America, it has not been an issue that brands have not paid for orders that they had already placed and were in production,” Wishart said. “Although cases may exist, we have not received any report of this from the unions and workers we are in contact with and work with.”

El Salvador

Many workers in El Salvador lost their jobs when factories closed during the pandemic. The number of laid off or suspended maquila workers in El Salvador is close to 70,000. As reported back in March, the El Salvador government promised payments of $300 to low-income workers mostly in the informal sector. As of May 4, according to the FEASIES union federation, 1.5 million citizens eligible for this relief still had not received it. De Simone Pereira shared that only about 749 maquila workers who had been furloughed or suspended received due compensations and benefits as mandated by law; she also emphasized that maquila workers did not qualify for the $300 low-income payments from the government. FEASIES legal counsel has been attending a hotline for worker rights denunciations during the crisis.

Many factories are providing compensation to workers during the shutdown with payments that are being called ‘bonuses.’ These payments are a little more than half of the minimum wage. “Most factories have made payments to workers. A lot of those are bonuses — they are using the word ‘bonus’ — of $100 to $150 to help workers make it through the quarantine period. This amount is 50 to 65 percent of the minimum wage. These are all coming from factory owners,” De Simone Pereira said. “The vast majority of factories have suspended work contracts. This is technically illegal because according to the law this is a firing and no one is allowed to be fired during the time of quarantine, so there’s going to be thousands of cases that are filed denouncing this.” 


In Guatemala several factories remained in operation, and March reports had indicated that not all operating factories were complying with recommendations and requirements related to health and safety. 

On May 18, a Guatemalan television station reported that a garment factory had closed in response to 20 suspected cases of Covid. To date, the number of suspected cases at this particular factory has skyrocketed to more than 200. It’s been rumored that the factory failed to take proper health precautions. 

In Guatemala, while there have been reports that brands have outstanding invoices for unpaid orders, there has been no confirmation about which brands have outstanding payments. Vestex’s president Alejandro Ceballos told Sourcing Journal that there were about $400 million in cancelled orders in Guatemala and that one brand left several containers of orders unclaimed (worth about $100,000 per container).

Wishart said that workers whose employment was suspended are eligible to receive financial support from the government; workers would receive about 75 quetzales (or about $10 a day) through the fund, and the payments are less than the minimum wage. Wishart reported that some workers were already receiving their payments.

Woman working in a silk factory in Cambodia.

Asia — Cambodia & Sri Lanka


The Khmer Times reported that laid-off garment workers in Cambodia were expected to receive wages of about $40 every month. According to figures cited to the Garment Manufacturers Association (GMAC) in Cambodia in an article by the Times, “180 factories have suspended their operations with 60 more in the pipeline affecting more than 150,000 workers now out of work without a clear indication when they can return.”

Sri Lanka

According to an interview that Anton Marcus, Joint-Secretary of the Free Trade Zone and General Services Employees’ Union, gave to Wedabima for a story published on May 14, there is a trilateral task force in Sri Lanka comprised of union, employer, and government representatives that have met six times to open dialogues about worker and business safety.  

Marcus told the website that during the most recent meeting, the government had asked for workers to return to factories even though many factories had laid off workers. Marcus said that collective bargaining efforts called for 30 percent to return to work in bi-weekly shifts (two weeks on, two weeks off) to decrease the likelihood of further job losses. Marcus also explained that unions countered the employer wage offers and an agreement was made for workers to receive Rs. 14,500 or half of their regular pay; this would cover May and June for the two weeks that workers were unable to work. In addition, Marcus told the site that the negotiations also provided a ‘pro-rata salary’ for the two working weeks each month.

Wedabima reported that on May 19th, a Sri Lankan factory that manufactures for brands in the U.S. had closed and workers were preparing to strike.

Ask Brands to #PayUp

Delayed payments from brands pose an immediate financial threat to the livelihoods of garment workers. The delayed payments leave garment workers without a financial safety net, threatening their survival. Remake continues to urge brands to #PayUp and every signature on the #PayUp petition sends a message to brands that they need to meet their obligations to factories and workers.

Sign the petition!


Images: gaelx/Flickr, Unsplash, Remake

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