Supply Chain Innovation

Back-Pay for Owed Overtime Wages in El Salvador

Publication date: 
Wednesday, November 18, 2009

Issues: During a 2004 factory visit, FLA assessors learned that a facility producing t-shirts and performance apparel for VF Corporation was not accurately compensating all workers for overtime work. Workers were paid $0.63 per hour and, according to law, regular overtime (not on a rest day or weekend) should be paid double ($1.26 per hour). When asked, factory management said they were not aware of the law. The factory employed 1,329 people.

Solution: A follow-up visit by VF Corporation in 2005 (confirmed again during a 2009 FLA verfication visit) showed that the factory back-paid wages owed to workers on February 1, 2005. Total payment for owed wages was made in one lump sum of $25,000. Separate receipts for this back-pay are on file and with VF Corporation.