JAKARTA, Indonesia (AP) — Sports equipment maker Nike Inc. has agreed to give workers in Indonesia $1 million in unpaid overtime, employee representatives said Thursday.
A national trade union representing nearly 4,500 employees from the PT Nikomas shoe plant in Banten province said Nike had failed to pay close to 600,000 hours over a two-year period. After 11 months of negotiations, the Seattle-based company reached a $1 million settlement, said Bambang Wirahyoso, the union's chairman.
The money will be distributed to the workers by early next month.
Officials at Nike could not immediately be reached for comment.
Wirahyoso said he hopes the case will set a precedent in a country where factory employees often work seven day weeks without overtime or proper benefits.
"This has the potential to send shockwaves through the Indonesian labor movement," Wirahyoso said in a statement, adding that his union is gearing up to fight for other workers. "We have only just begun."
The company, which came under heavy criticism a decade ago for its use of foreign sweatshops and child labor, has taken steps since then to improve conditions at its 1,000 overseas factories.
Jim Keady, director of Educating for Justice, a U.S.-based group that has been working with Indonesian Nike factory workers for more than a decade, said he was pleased with the latest development.