Labor abuses a 'risk worth taking' for fashion firms, UK lawmakers say

Fashion workers in Britain are being cheated of fair wages as lack of tough action make abuses “a risk worth taking” for factory owners, lawmakers said on Tuesday.

Ministers were accused of failing to act following reports of some workers being paid as little as 3.50 pounds ($4.43) per hour, less than half the minimum wage.

“It’s clear that modern slavery is happening in plain sight and potentially in garment factories in the UK,” said Mary Creagh, chair of the U.K. parliament’s environmental audit committee, after a hearing about sustainability in fashion.

“Basically, it’s a risk worth taking if you are a factory owner...There is an incentive not to pay minimum wage because the chances of getting caught are infinitesimally small,” she told the Thomson Reuters Foundation.

Committee members said insufficient action was being taken against those committing labor abuses in Britain.

There have been just 14 prosecutions for non-payment of the minimum wage since 1999, the hearing heard, and Creagh said checks on factories were rare and fines for those underpaying workers were often only a few hundred pounds.

The government is acting on claims of abuse, said Kelly Tolhurst, the minister for small business.

“It’s not right that people are not paid the national minimum wage and we will enforce on that,” she said.

Lack of clarity over supply chains, even within Britain, can make prosecutions difficult, the hearing was told.

“When we go to some locations, it’s quite difficult to identify who the employer is,” Janet Alexander of HMRC, the body responsible for UK tax collection.

Online retailers Asos, Boohoo and Missguided were called to parliament last month over concerns a surge in cheap “fast fashion” could be helping to drive labor abuses among some British garment makers.

Boohoo joint chief executive Carol Kane was asked how they could afford to pay British factory workers the minimum wage of 7.83 pounds when selling dresses for as little as 5 pounds.

She said that they were “a loss leader” and a marketing tool to drive visits to the website.

The brands faced questions over their use of factories in the central city of Leicester, where media investigations have uncovered widespread underpayment of garment workers.

About 136,000 people are estimated to be living as modern day slaves in Britain, according to the 2018 Global Slavery Index, with forced labor believed to be rife across Britain’s building sites, nail bars, car washes, factories and farms.