Leader Garments
Ilopango, El Salvador
Kohl’s, Sears and Target
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- Mandatory Pregnancy Tests; women testing positive are immediately fired.
- Obligatory Overtime; six days a week, 13-hour shifts.
- Locked in Factory Compound.
- Paid 60 cents an hour - less than one-third of the cost of living.
- Workers paid less than 20 cents for each $14.99 Kohl’s child’s dress they sew.
- Constant pressure to reach excessively high production goals; workers are screamed at, garments thrown in their faces.
- Extreme heat on factory floor.
- Absolutely no right to organize.
- Kohl’s Code of Conduct totally unknown; when questioned, workers have no idea what is being referred to.
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Leader Garment S.A. de C.V.
San Bartolo Free Trade Zone
Avenue Chaparrastique and Nonualco Street
Buildings 19 and 20
Ilopango, El Salvador
| Telephone: | (503) 295-1378 |
| Ownership: | Taiwanese / Makalot Industries Company, Ltd. headquartered in Taipei,
Taiwan. Makalot owns 12 factories located in El Salvador, Indonesia, the Philippines and Taiwan, employing more than 10,000 people. |
| Manager: | Mr. Hong Jen Huang |
| Workers: | Approximately 900 |
| Labels: | As of March 21, 2001, Leader was producing clothing for both Kohl’s, Target and Sears. Kohl’s accounts for approximately 60 percent of the work in the factory. Kohl’s labels made at Leader include Croft and Barrow and Moments Intimates. Sears label is Bold Spirit. |
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Note: There appears to be an intimate relationship between the Leader Company and the Chentex factory in Las Mercedes Free Zone in Nicaragua, where Kohl’s clothing is also produced. From the attached Leader Company ledger dated January 26, 2001 (found by workers on the ground outside the factory) it is clear that Leader spent over $71,000 assisting the Chentex company; bringing a Mr. Chao from Chentex in Nicaragua to El Salvador; purchasing house equipment, and paying both registration and mayoral fees for Chentex. |
The number one country of origin for Kohl’s products is China, but Kohl’s apparently also has close ties with Taiwanese companies. Chentex, a Taiwanese company, also produces for Kohl’s. In May 2000, when the workers at Chentex sought an eight-cent wage increase, all 11 union leaders were fired along with more than 200 workers. The workers are paid just 20 cents for each $30 pair of jeans they sew for Kohl’s. In April 2001, the highest court in Nicaragua - whose decisions are not open to appeal - ruled that the union leaders were fired illegally and must be immediately reinstated to their former jobs, without discrimination and with all back wages for every day they were illegally locked out. Even in the face of the decision by the highest court in Nicaragua, Chentex still refuses to reinstate the fired union leaders. Kohl’s has done absolutely nothing, not even lifting a finger to phone their contractor, Chentex, to demand that they obey Nicaragua’s highest court.
Hours - Forced Overtime:
In March, 2001, Leader’s workers were forced to work 13-hour shifts, Monday through Friday, and another four-to-eight-hour shift on Saturday. All overtime work is strictly obligatory. Failure to work overtime is punished with the loss of one day’s pay (what is known in El Salvador as the "7th Day") and a written warning. After three warnings a worker is typically fired.
Workers are at the factory 69 to 73 hours a week, while being paid for 64 ½ to 68 ½ hours.
- Monday through Friday: 7:00 a.m. - 8:00 p.m.
- Saturday: 7:00 a.m. - 12:00 noon, or 4:00 p.m.
| Monday through Friday: | 7:00 a.m.- 9:00 a.m. | Work |
| 9:00 a.m. - 9:15 a.m. | Break | |
| 9:15 a.m. - Noon | Work | |
| Noon - 12:30 p.m. | Lunch | |
| 12:30 p.m. - 8:00 p.m. | Work |
When "Shipments" do not demand forced overtime, the regular workweek is:
- Monday though Thursday 7:00 a.m. - 5:00 p.m.
- Fridays 7:00 a.m. - 4:00 p.m.
In this case, the workers are at the factory 49 hours a week, while being paid for 44 hours. In fact, the workers are being cheated of an hour and 15 minutes of pay, since they are actually working 45 ¼ hours, not 44. Even during relatively slack periods, forced overtime on Saturdays is quite common.
- Locked in: The workers are locked in the factory compound and are not permitted to leave even during their lunch break. There is a factory cafeteria, but lunch there costs 15 colones ($1.71) which very few workers can afford, given that their base daily wage is just $4.80. Lunch at the factory cafeteria would consume 36 percent of their wage. Instead, the workers are forced to reach over the cyclone fence and through the barbed wire surrounding the factory to purchase their lunch from local vendors. Most of the workers can afford to eat only tortillas, cheese and a soda, which costs approximately 57 cents.
- Wages: The Leader workers are paid the minimum wage in El Salvador, which is 60 cents an hour. However, if the workers maintain a perfect attendance and punctuality record, work all the forced overtime, take no sick days and cause no problems for management, they can also earn what is known in Latin America as the "Seventh Day’s" pay.
| The wage structure is as follows: | 60 cents an hour |
| $4.80 a day (8 hour shift) | |
| $33.19 a week (44 regular hours) | |
| $143.84 a month |
By law, overtime is paid at a 100 percent premium, or $1.20 an hour. So someone working 64 hours a week would earn $57.19 - $33.19 in regular pay and $24 in overtime.
It should be noted that the 60-cent-an-hour wage provides only 26 percent of survival needs for the average sized family in El Salvador, which is why the workers are so dependent on working the long overtime hours in an attempt to come even close to meeting their families’ basic needs.
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How Do Maquila Wages Compare with Other Local Industries? Not So Well.
-Maquila workers earn 60 cents an hour-
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- Production schedule / High production quotas: The production lines are located in the second floor of the Leader factory. There are 20 lines in all with 25 workers per line. Twelve lines are producing for Kohl’s, with the other eight sewing for Sears. U.S. Customs documents reveal that in a single month, December 2000, Leader shipped 11.4 tons of clothing to Kohl’s.
The factory sets a daily production goal for each line. For the six lines producing Kohl’s Moments Intimates children’s dresses, the mandatory goal is 650 outfits per shift. The regular shift at Leader is from 7:00 a.m. to 5:00 p.m., or 10 hours, with a morning break and 30 minutes off for lunch. For the nine hours and 15 minutes of work, the sewers are paid $5.55, which for all 25 workers on the line, brings the total daily payroll to $138.75. These 25 workers sew 650 dresses per day, which retail at Kohl’s for $14.99 each. This means they sew $9,743.50-worth of dresses per day. So it is possible to calculate that the sewers wages come to just 1.4 percent of the retail price of the dresses, or a little less than 20 cents of labor for each $14.99 dress.
Like other maquila factories, Leader, keeping wages at well below subsistence level, can then add a small incentive bonus for the workers who reach their production goal, knowing that this will drive the women to work that much faster. For workers who meet their assigned production quota for all five days, the reward is a $1.14 a day bonus - or 12 cents an hour. If they fall behind in their quota just one of those days, the entire bonus is lost.
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The Law in El Salvador
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More Violations of Worker Rights:
- Mandatory pregnancy tests: To get a job at Leader, women must present the results of a urine test for pregnancy from a private laboratory, which costs them $5.71 - more than a full day’s wage. After three months on the job, the women are again tested, this time in the factory clinic. Any woman who tests positive is immediately fired.
- Maltreating the workers: The workers report constant pressure and humiliation. The Taiwanese supervisors constantly berate and scream at the women to sew faster. One Taiwanese supervisor named Susan often throws the garments in the workers’ faces and, at one point, threatened to stab a woman sewer with a pair of scissors. The workers are afraid and feel humiliated.
- The factory is very hot: There are 10 ventilators, which are apparently insufficient, since temperatures on the factory floor rise to excessive levels.
- Kohl’s Code of Conduct totally unknown: Kohl’s claims to have a corporate Code of Conduct which guarantees the human and worker rights of any person anywhere in the world producing goods for sale in Kohl’s stores.
At the Leader factory, however, no Kohl’s Code of Conduct has ever been posted, let alone explained to the workers. When questioned, the workers were completely ignorant of such a Code protecting their rights, or even the concept that a U.S. retailer like Kohl’s might concern itself with their human rights. Kohl’s Code of Conduct is apparently meant only for public relations purposes.
- Absolutely no right to organize: If any worker sewing Kohl’s clothing at the Leader factory attempted to form or join an independent union, she would be immediately fired and blacklisted on the spot. Despite the below-subsistence wages, the forced overtime, the humiliating treatment at the hands of the supervisors, and the mandatory pregnancy tests, there is not one single functioning union with a contract in any of El Salvador’s 229 maquila factories employing 85,000 mostly young women workers. Every single attempt to exercise the legal right to freedom of association is crushed through mass illegal firings and blacklisting.
- After the devastation of the earthquakes, not one cent from Kohl’s:
Kohl’s did not send a penny to help the workers or the people of El Salvador
after three strong earthquakes in January and February left more than 1,170
dead and 23 percent of the population homeless.
All the Leader factory could apparently manage was to distribute $5.71-worth of rice, beans, salt, sugar and a single bed sheet each to about 200 of the workers whose homes suffered the greatest damage.