On July 18, 2022, workers were making clothes at a clothing factory supplying cross-border fast fashion e-commerce company SHEIN in Guangzhou City, Guangdong Province, southern China.
Gao Yu | AFP | Getty Images
As fast fashion giant Shein prepares to list in the United States, a new report shows that workers at some of its suppliers are still working 75-hour weeks despite the company’s assurances that it will tighten labor standards.
The report, released on Tuesday, details Follow-up investigation by Swiss advocacy group Public Eye In 2021, it was discovered that employees in factories in Guangzhou, China, worked excessive overtime and had poor working conditions.
The following bad news Following the previous report, Shein promises improvements its standard. However, a new investigation by Public Eye, which surveyed 13 workers at six suppliers in China, found little progress.
“Illegal working hours and piece-rate wages continue to be typical features of the daily lives of the workers interviewed,” the organization said. The interviews were conducted late last summer.
In response to CNBC, Shein claimed: “We do not acknowledge many of the allegations in this report.”
Public Eye said respondents worked an average of six to seven days a week, 12 hours a day, excluding lunch and dinner breaks – a breach of Shein’s Supplier Code of Conduct.
“I work from 8 a.m. to 10:30 p.m. every day, with one day off every month. I can’t take any more time off because it’s too expensive,” Public Eye quoted one employee as saying.
Shane’s response
A Shein spokesperson told CNBC the company is investing tens of millions of dollars to strengthen supply chain governance and compliance.
“Public Eye’s discussion of working hours and wages is important to us and we have made significant progress in improving conditions across the entire ecosystem.”
The spokesperson also noted that Public Eye’s report was based on interviews with a small sample of six factories and that Shein’s supply chain relies on thousands of third-party suppliers and contract manufacturers in China.
Shein’s statement also pointed to CNBC’s findings second salary survey It ended last June. The company said thousands of third-party audits of its suppliers found low wage violations, with workers earning on average more than twice the local minimum wage and 50% higher than the living wage in Shenzhen.
“The report analyzed 13,341 samples from 999 supplier factories in 12 provinces and 43 cities in China,” Shein claimed.
Still, Public Eye argued that its investigation cast doubt on factory audits commissioned by Shain, noting that they focused only on monthly wages, not the hours employees worked. It added that omitting working hours was part of blatant “Whataboutism”.
According to Public Eye, if workers work 75 hours per week instead of the standard 40 hours, their base salary after overtime pay is only about 2,400 yuan ($330) per month.
Public Eye cited other potential problems with Shein’s suppliers, including workers who appeared to be underage and lax enforcement of a smoking ban near a fabric warehouse. Shein said the company has a strict policy on child labor and that such violations will result in immediate termination of business with the supplier.
The group added that Shein used a number of offshore entities to conceal ownership and avoid taxes. The company registered its headquarters in Singapore in 2019 and has been based there since 2021.
IPO plans cloudy
Since entering the fast fashion retail sector in 2012, Shein has risen rapidly.
However, Public Eye’s latest report adds to the list of controversies the company has encountered, all of which have damaged its reputation and threatened to hinder its growth. It plans an initial public offering in the United States, one of its largest markets.
U.S. regulators have previously accused the company of benefiting from Forced labor in Xinjiang, Chinahuman rights violations and torts.
at the same time, Shein is often sued Intellectual property theft, fashion brands and artists accuse retailers of systematic plagiarism.
The House Select Committee on Chinese Communist Party is investigating Shein’s ties to Beijing and his data privacy practices.Lawmakers also called on the SEC to investigate allegations of the use of forced labor in Shein’s supply chain before it is allowed to go public in the U.S.
According to CNBC, Shein is trying to solidify its reputation by applying to join the National Retail Federation, the world’s largest retail trade association. But he was repeatedly rejected.
According to previous reports by CNBC, Shein was recently valued at $66 billion and is expected to become one of the largest listed companies this year if it proceeds with its IPO.
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