Despite their formal commitment to require payment of severance, brands’ actual purchasing practices are a major contributing cause of pervasive severance theft. tivizes suppliers to minimize labor costs by choosing not to set aside money to cover future severance liability. The brands themselves are financial beneficiaries: suppliers save money by neglecting the need to fund their severance liability and much of those savings are then passed along to the brands in the form of lower prices than a factory would otherwise have to charge. In addition to giving their suppliers financial reason to forgo funding severance obligations as they accrue, brands further encourage this recklessness by failing to police suppliers’ practices. The WRC is not aware of any major brand that, as a matter of publicly announced policy, includes in its pricing an additional margin for suppliers to pay future severance obligations and then requires suppliers to set aside sufficient money for this in escrow or an externally controlled fund. This is despite the fact that it is well understood within the industry that nonpayment of legally mandated severance is a chronic problem. At the same time, a leading cause of garment factories shutting down or otherwise needing to dismiss workers en masse is brands’ own business decisions with respect to suppliers—to cease or sharply reduce orders from a particular supplier, a group of suppliers, or even an entire country—or, as during the current pandemic, retroactively WRC yz canceling orders that were already placed and have been wholly or partly produced.41 As a result, employers’ obligation to pay severance—and workers’ need for severance to be paid—is often triggered exactly when the employer is most likely to default. Even an employer that does not wish to cheat workers of severance may be placed by brands in the position of not being able to avoid doing so. The sum impact of brands’ sourcing strategies in contributing to severance theft is reflected in its pervasiveness in many garment-exporting countries, as evidenced, for example, in the statistic, cited by adidas, that, in Indonesia, two-thirds of garment workers do not receive the severance they are owed.42 Remedy for Severance Theft Requires Brand Accountability Brands have committed, in their policies and codes of conduct, to require suppliers to meet their severance obligations to workers. Through their purchasing practices, however, brands regularly contribute to this obligation being violated, with disastrous consequences for workers who have made their goods. For this reason, the WRC and other labor rights advocates have emphasized that brands have an obligation to ensure that severance is paid—if not by the factory’s owner, then by the brands themselves. Fired, Then Robbed zy Page 8