Central American garment workers have been illegally denied $2 million in compensation since a factory they worked at closed two years ago, according to a recent report from the Worker Rights Consortium (WRC), a labor rights investigative organization.

The WRC report showed that back wages, severance and other benefits were withheld from 831 workers at the APS factory in Ilopango, El Salvador, after the facility went out of business. The workers were producing goods for companies that included HanesBrands (asi/59528) and Top 40 supplier Gildan (asi/56842).

Representatives from HanesBrands and Gildan didn’t respond to ASI Media’s request for comment on the situation.

The WRC noted in its report that APS informed its workforce on Aug. 30, 2022, that it was permanently closing operations. The Salvadoran Ministry of Labor determined that APS owed workers around $2 million for unpaid wages, legally owed severance and other terminal benefits. After investigating the complaint, the WRC recommended that brands involved in the factory “should make sufficient contributions, themselves, to ensure that, consistent with their own codes of conduct for labor practices at their supplier factories, the APS workers received the compensation that was legally due at the time the factory closed.”

Apparel brands Gildan and Kellwood as well as Alwants, a company that was involved as an agent buying apparel from APS, all made significant commitments to contribute funds, amounting to 67% of the compensation legally due to the workers, according to the WRC. That leaves about $659,000 in wages and benefits outstanding, the WRC said in its report.

While acknowledging that it sourced apparel for its Champion brand from APS, HanesBrands “has not been willing to make a substantial contribution to assist the workers, offering only a token amount,” the WRC said.

The closure of the factory has resulted in significant hardships for many of the former APS workers, with some reporting that they’ve been struggling to pay rent, utility bills, school fees and to put food on the table, according to the Sourcing Journal.

El Salvador’s labor laws require that workers must be paid immediately for all wages and terminal compensation after a factory closes.