Invisible Stitches: The Hidden Human Cost of Pakistan’s Garment Exports

Pakistan’s labour laws require written employment contracts for all workers, and mandate that contracts be submitted to labour departments. Contracts must include the terms and conditions of employment and be provided to the worker. The reality in most factories is very different.

Of the workers interviewed, 31% had not signed any contract. Among those who had, 62% had not received a copy. Without a signed contract in hand, workers cannot prove their employment or claim unpaid wages, social security, or other entitlements. Many workers were unsure of their employment status, and whether they were hired by the factory or through a third-party contractor.

In interviews, 89% of respondents identified as “permanent” workers. However, a quarter of these lacked an employment contract. Focus group participants estimated that contract workers made up 20–30% of the workforce in their units. In four units, respondents said 60–75% of workers were paid on a piece-rate basis.

These informal employment arrangements shift risks from employers to workers. When production demand drops, piece-rate and contract workers are the first to be sent home. Workers reported that they were often sent home without pay, or removed from the list of workers called back to work. Many piece-rate workers did not know how many pieces they had stitched or how their wages were calculated. Without records, it is difficult to challenge underpayment or unpaid overtime.

Women and internal migrants are disproportionately affected. In Karachi, 80% of respondents were internal migrants, compared to 43% in Lahore. 23% of all interviewed workers were women. Focus groups reported that women were more likely to be on piece-rate contracts, and less likely to be given permanent status. Employers take advantage of their limited mobility and bargaining power.

Informal employment results in a lack of legal entitlements such as paid leave, bonuses, and social security. Workers are denied maternity benefits and gratuity payments. They are also excluded from factory health and safety committees or grievance mechanisms, which are legally mandatory but largely non-functional.

Many workers do not receive itemised pay slips. 26% of respondents said they received no pay slip at all. In Karachi, workers said wages were paid into “payroll accounts” that were not in their names. These accounts were controlled by employers or supervisors, making it impossible for workers to verify what they had earned. Workers reported receiving overtime and bonuses in cash, without any documentation.

Unit 1, which closed in May 2024, illustrates the consequences of informality. Around 3,000–4,000 workers were dismissed without notice, severance, or end-of-service benefits. Fifteen of these workers were interviewed for the report. Many said they had worked at the factory for 8–10 years but were treated as if they had never been employed. Several could not find new jobs because they lacked reference letters or proof of employment.

The factory had been audited by international buyers, and was considered compliant. Yet the workers had no contracts, no social security coverage, and no access to grievance mechanisms. When the factory closed, they were left with nothing. This case shows how informality creates systemic vulnerability—and how easy it is for employers to offload their responsibilities without consequences.

These are not isolated incidents. They point to a systemic pattern of informality, opacity, and exploitation. Without written contracts, payslips, or grievance mechanisms, workers are rendered invisible. Employers reduce costs and avoid accountability, while workers bear the risks of uncertain employment. The lack of legal enforcement and brand accountability allows these practices to persist unchecked.

Pakistani labour law limits the regular workweek to 48 hours, and allows for a maximum of 8 hours of overtime. Yet 60% of respondents said they worked more than the legal limit. In Karachi, 93% of respondents across the four investigated units reported working 10–11 hours a day, six days a week. Overall, 94% of all respondents said they worked overtime.

Overtime was rarely voluntary. 65% of respondents said they could not say no to overtime. Those who refused were shouted at, denied workplace access, or put on forced unpaid leave. In some factories, refusal to do overtime was counted as absenteeism. Several workers said that after a minimum wage hike, employers had reduced their workforce and expected the same amount of work to be done. Production targets remained the same, or even increased. Some units had cameras monitoring washroom breaks. Workers said they were not allowed to sit during breaks.

Minimum wage violations were reported in five of the eight factories. Seven respondents reported monthly wages below the legal minimum of PKR 32,000. Six of them were piece-rate workers, who received between PKR 25,000 and PKR 30,000 per month—despite working 54 hours per week. Their legal entitlement, including overtime, was PKR 40,049 (€132.54). In Karachi, 49 respondents said they worked 66 hours per week. Their legal entitlement was PKR 56,128 (€185.78). Reported earnings ranged from PKR 32,000 to PKR 45,000, suggesting a wage gap of up to PKR 24,148 (€79.93) per month. Some lost nearly half their rightful income every month. 86% of respondents were not paid what they were legally owed.

About 99% of respondents did not earn a living wage for a regular 48-hour workweek, based on estimates by the WageIndicator Foundation. Meaning even with extended hours, workers cannot cover basic needs, a fundamental human right. With 41% of workers trapped in debt cycles, the human cost extends beyond individual suffering to affect entire families and communities.

Employers use punitive attendance policies to exert control. In Karachi (Units 1 to 4), 78% of respondents reported receiving an “attendance allowance”—a performance bonus that was revoked if the worker took even one day of leave. In Lahore (Units 5 to 8), only 9% of respondents said they received such a bonus. Workers said these policies applied even to sick leave or funerals. This system allows employers to deny leave without formally rejecting it, and to discipline workers without triggering legal procedures. It severely curtails their ability to take necessary breaks or sick leave.

Wage theft was further enabled by opaque and informal wage systems. 26% of respondents said they did not receive pay slips. Many were paid in cash. Others were paid into “payroll accounts” that were not registered in their names. These accounts were controlled by employers or supervisors, leaving workers unable to check their wages or raise complaints. Piece-rate workers were paid based on verbal agreements or handwritten notes. They could not verify whether they had been paid for all the pieces stitched. Overtime and bonuses were often paid off-record.

Social protections were largely absent. 78% of respondents were not registered with the Employees’ Social Security Institution (ESSI), and 80% were not registered with the Employees’ Old-Age Benefits Institution (EOBI). Even among those registered, 88% had not received an ESSI card and 95% had not received an EOBI card. Without these documents, workers cannot access public hospitals or check whether employers are making contributions.

In Lahore, a worrying trend was the use of private health insurance in place of ESSI. Workers at Units 5 and 6 said they had been enrolled in private plans that offered limited coverage and excluded family members. In some cases, the full premium was deducted from workers’ wages. These private schemes do not cover indirect benefits such as access to social housing or free education. This shift exacerbates workers' vulnerability, eroding access to comprehensive protections and transferring financial responsibility for healthcare entirely to them.

None of the factories had a formally recognised independent trade union acting as a bargaining agent, nor were any collective bargaining agreements in place. Only three of the 124 workers interviewed were union members. 70% of respondents said they did not know what a trade union was. This is a direct consequence of strong anti-union bias among employers, who perceive any worker organisation as a threat.

Workers said they feared being denylisted—that is, barred from working in the same industrial area—if they spoke out. Interviews with labour rights organisations confirmed that workers attempting to organise faced intimidation, surveillance, and threats. Several workers said they were asked to sign blank documents or not given time to read them. They said employers did not provide copies of employment contracts, even when requested. Without proof of employment, workers cannot seek legal redress.

Almost 88% of respondents said they had not raised any complaints at work. Of the few who had, none said the issue had been resolved. Workers said they feared losing their jobs, or not being called back after production breaks. Most said they did not know how to raise a complaint, or who to approach. Where grievance mechanisms existed, they were not accessible or functional.

Statutory committees such as works councils and health and safety committees were either missing or did not function. 92% of respondents said there were no such committees, or that they had not heard of them. In one factory, a sexual harassment committee had been formed but no one knew who was on it. Workers said that these committees existed only for audit purposes.

Workers in focus group discussions described how factories created false and ideal environments during audits. Specific workers were selected in advance to speak to buyers or auditors. These workers were told what to say, and what not to say. In one factory, workers were told not to mention that they had worked on Sunday. In another, factory managers removed child workers before the audit visit. The entire process was staged to pass the audit.

Mainstream social audits consistently fail to detect these violations. Workers said they were instructed to lie, and that real production conditions were hidden. Auditors did not ask the right questions or spend enough time on site. In many cases, workers said they were afraid to speak. Governments and buyers must protect workers and researchers from retaliation and ensure that transparency is not punished.

The findings of this report were shared with 11 international buyers. Ten responded. Inditex, Levi Strauss, Mango and Kontoor Brands provided the most detailed responses. Mango confirmed that several non-conformities had been identified and said that it would develop a time-bound corrective action plan with the manufacturer in question. This would include action on working hours, contracts, and freedom of association.

Levi Strauss said that corrective actions had already been implemented at Units 3 and 7. The brand confirmed that it had identified wage and hour violations through its own assessments. Kontoor Brands said that it was following up with suppliers to ensure minimum wage payment and social security registration. Inditex said it had taken steps to compensate workers affected by the closure of Unit 1.

Bestseller, Boohoo (now Debenhams), C&A and H&M provided general statements about due diligence or follow-up, but largely avoided specific commitments to bridge the significant living wage gap. Gap did not respond.

The contrast between brand policy and factory reality remains stark. While brands require suppliers to comply with national law and codes of conduct, they do not ensure that these are implemented. Short-term production cycles, aggressive pricing, and voluntary audits create perverse incentives that punish compliance and reward deception.

Unit 7 stood out for partial compliance. All 15 respondents from this factory had signed contracts, and most had received a copy. They reported receiving legal minimum wages, working a regular shift, and being registered with ESSI and EOBI. Workers also said they had received statutory bonuses and travel allowances. However, they still did not earn a living wage, and none were union members. This shows that basic legal compliance is possible—but that living wages and freedom of association remain out of reach.