Protecting workers' rights in El Salvador

Lydia DePillis has an interesting article on Why it’s so hard to protect workers caught in global supply chains in the Washington Post that uses El Salvador as an example.

What happened at Rivera’s factory illustrates one of the biggest problems in the global supply chain: How to protect workers in a brutally competitive industry where factories constantly close and open, as brands chase new trends and lower costs, and no one is held accountable for laws broken along the way.

Like most developing countries, El Salvador has no real form of workers compensation, but it does require factory owners to pay people lump sums in the event of a closure — usually about a month of salary for every year worked. That can be the largest amount of money a worker ever sees at one time, and it’s essential to tide them over until they find a new job.

But all too often, the factory owners don’t pay up — it’s a large sum, at a time when the factory is often in financial distress. Liquidating their assets takes a painfully long time, and usually doesn’t yield enough. And left to their own devices, apparel brands have little incentive to force factories to set aside money for future severance payments, since that might increase costs.

Hanes is one of the companies that ponied up when a factory it purchased materials from closed down and the owner of that factory failed to pay the legally required severance to workers. I guess that is one of the reasons why HanesBrands was honored by the Great Place to Work Institute for its workplace practices in its Salvadoran manufacturing plants.

However, it's not all good news. A union activist alleges that the owner that closed the factory did so because its workers had attempted to unionize.