Abstract

Textile is one of the largest export and source of foreign exchange in Pakistan. For the last two decades, Textile sector is serving as the backbone for Pakistan economy. Several foreign retailers including Target, Jessie Penny, Wal-Mart, and Kohl’s are outsourcing textile and garments from Pakistan. Along with the quality, these retailers are highly concerned with the ethical and social issues of their suppliers, including child labor, forced labor, compensation, working hours and environment health, and safety. My current study is an applied research, based on the problem, regarding the working hours and its proper management in textile factories, mismanagement of which lead to serious issues during social and ethical standard audits. Repetition of which may consequent in termination of business with suppliers and factories. The research hypothesis is that working off the clock will lead to overtime premium not paid and double book record keeping. As far as ethical and social compliance is concerned both overtime premiums not paid and double book records are critical issues during SC audit. A sample of 40 suppliers of Pakistan was randomly selected working with foreign buyers. Secondary data were used to verify the findings based on Audits finding conducted by different third party during a period of 2 years, i.e. Feb., 2010 to Jan., 2012. The results and research findings reflect that during the last 2 years out of 40 factories audit reports 25 factories were found having working off the clock that also lead to overtime premium not paid. However, double book records were not witnessed in all 40 factories SC audit reports as parallel records were not maintained by any factories. The above findings will help the suppliers, factories, and buyers to develop a proactive approach and proper production planning to avoid critical issues and smooth business activities.