A new report by NGO Arisa investigates labour rights issues in eight vertically integrated denim factories in Pakistan supplying major global brands. It also flags that civil freedoms in Pakistan are shrinking and that this is limiting NGO and trade union rights.
On 3 July 2025, NGO Arisa published Overworked and Underpaid, a report detailing labour abuses in eight vertically integrated denim factories in Pakistan supplying global brands. Arisa used supplier lists on brand websites or Open Supply Hub to link brands to factories.
The investigation took place between July 2023 and June 2024, and included interviews with 126 workers, as well as additional interviews with representatives of labour rights organisations, trade unions, multistakeholder initiatives, brands and retailers.
Key findings
The report sets out the following key findings:
- Civic freedoms in Pakistan are under significant pressure. NGOs face strict rules and permit denials, and new labour laws in Punjab and Sindh have made it harder for unions to operate and protect workers’ rights.
- Garment workers from caste-affected communities, including Hindus, but also Muslims and Christians, are usually given low-paid, insecure jobs. They are hired through contractors, don’t have job protections, and are often not part of unions. There is a growing number of workers from oppressed caste communities in Karachi’s garment sector.
- Trade unions and NGOs estimated that 20-30% of workers in garment factories are employed through third-party contractors, especially during peak production periods.
- 31% of respondents had not signed a contract, and 62% of those who had did not receive a copy. 26% of workers did not receive pay slips.
- 40% of workers reported 13–22 hours of overtime per week and 3% reported more than 23 overtime hours per week, exceeding 71 total weekly hours. The extent of overtime varied by factory. 65% of workers reported they could not refuse overtime without facing verbal harassment, threats of dismissal, unpaid leave, or gate denial.
- Reported wage issues included non-payment of the minimum wage to 6% of workers and claims that some factories laid off workers before Eid to avoid paying the Eid bonus. 80% of workers reported wage deductions for lateness, absenteeism, or meals. While 84% of workers are paid via bank transfer, legal double pay for overtime was lacking or inconsistent, and workers do not earn a living wage during a standard work week. One of the factories (Unit 7) stood out as an outlier where workers had a lower living wage gap and received better benefits.
- No factory had an independent union or collective bargaining agreement. 70% of workers didn’t know what a union was and 92% reported no functioning statutory committees or lacked awareness of them. Union busting tactics are common and trade union leaders claim that management often bribes workers to retract their demands.
- 41% of respondents were in debt. In some cases, workers had received advances of 35% to 40% of their wages or had received loans from their employer.
- 88% of workers had never filed a complaint, and several said they would avoid doing so due to fear of retaliation. Some workers who had raised complaints reportedly were dismissed as a result.
- 78% of workers were not registered with the ESSI, and 80% were not registered with the EOBI, excluding them from health care, pensions, and other legal benefits. Respondents in Lahore noted that employers were increasingly offering private health insurance, which reportedly does not have the same coverage as public insurance.
- One of the factories closed suddenly during the period of the study and workers reportedly were not paid adequate severance nor given sufficient notice.