10/05/2026
For many years, the KOA Modas factory, a supplier of apparel to Target, failed to make legally required social security contributions to the Guatemalan government on its workers’ behalf and, worse, stole workers’ own contributions by deducting them from their paychecks and then pocketing the money. These payments were necessary for workers to receive healthcare and, upon retirement, pensions.
When KOA Modas ceased operation in February 2025, it committed a further violation of workers’ rights by failing to pay 750 workers the severance benefits they were owed under the law—costing workers, on average, the equivalent of 14 months’ pay. After extensive advocacy efforts by the WRC and the factory workers’ unions, Sae-A Trading agreed to pay $5.3 million to ensure workers received their severance.
However, KOA Modas’ nonpayment of social security continues to plague its former employees. The factory’s theft of workers’ social security contributions is having a devastating impact on workers who have reached the retirement age of 60 and now cannot collect their pensions. These workers were employed at KOA Modas for as long as 25 years, more than long enough to earn a full government pension. Now they cannot retire and must keep working because they have no pension to support themselves.
The WRC calls on Target, the factory’s sole brand customer prior to its closure, to remedy this violation.
Our report:https://www.workersrights.org/app/uploads/2026/07/Factory-Assessment-at-KOA-Modas-Guatemala.pdf