SAE-A Secures US$ 6M Back Pay For Guatemala Garment Workers
More than 750 garment workers in Guatemala have received nearly USUS$ 6 million in compensation after losing legally owed wages and severance payments when apparel manufacturer KOA Modas ceased operations in February 2025.
The remediation was funded by SAE-A Global Trading, a major global apparel manufacturer and sourcing partner for Target, following efforts by the Worker Rights Consortium (WRC), which investigated the labour violations and facilitated discussions with worker representatives and the company.
According to the WRC, the payout is believed to be the largest back-pay settlement ever secured for garment workers at a single factory in Central America.
Workers at KOA Modas were reportedly denied more than USUS$ 5 million in severance payments after the factory’s closure. Prior to the shutdown, employees had also accumulated approximately USUS$ 460,000 in unpaid wages.
The WRC first investigated the factory in 2024 and documented the wage violations. Although the factory owner initially agreed to repay workers, the commitment was not fulfilled. Following the closure of the facility, the WRC urged SAE-A and retailer Target to ensure workers received the compensation they were legally entitled to.
After extensive negotiations, SAE-A agreed to provide funds covering about 95 per cent of the outstanding payments owed to workers. Efforts are continuing to recover the remaining amount through the sale of the factory’s assets and inventory.
Headquartered in Seoul, SAE-A is one of the world’s largest apparel manufacturers and supplies major international retailers. KOA Modas had produced private-label apparel for Target for nearly a decade and continued supplying the retailer through SAE-A until its closure.
The WRC praised SAE-A for taking corrective action and ensuring compensation for affected workers. The organisation noted that the company joins a growing list of global apparel brands and manufacturers that have provided remediation in response to labour rights violations identified within their supply chains.
The labour rights group also highlighted unresolved concerns related to social security contributions that were allegedly deducted from workers’ wages but not remitted by the factory’s owner. According to the WRC, this could affect retirement benefits for many former employees. The organisation said it plans to continue pursuing accountability regarding the pension-related issues.
