Fast fashion has significantly changed apparel supply chains with its rapid trend turnover, high volumes of low-cost garments, and frequent new collections. I led a NORC study analyzing the laws and policies governing the apparel (ready-made garment, or RMG) industry in Bangladesh. We focused on informal workers, those who don’t work in the factories that brands contract with—known as first-tier factories—but in informal subcontracting networks that these factories often use.

Labor standards in formal factories have improved since international buyers formed the Accord on Fire and Building Safety in Bangladesh and the Alliance for Bangladesh Worker Safety to promote better working conditions, escalate factory inspections, and demand greater accountability.

However, our research revealed a critical insight: Most labor risk in apparel is not in formal first-tier factories—it sits in informal subcontracting networks that conventional due diligence does not reach. The fast-fashion business model exacerbates this risk environment, since it leads first-tier factories to often accept more orders than they can safely produce. Excess work is pushed to informal factories, unauthorized subcontractors, and home-based or small workshops where labor abuses can occur outside the factories that brands officially know about.

Informal apparel factories that produce for domestic demand or work as under-the-table subcontractors for formal, export-oriented factories do not face the same levels of scrutiny and enforcement of labor laws. In fact, there is no active authority to oversee labor law compliance in the informal sector.

Bangladesh is the second largest textile and garment exporter in the world, and its RMG industry employs millions of workers, accounting for 83 percent of export earnings. NORC’s research focused on the informal sector and four specific themes:

• Gaps in Bangladesh’s legal framework
• Barriers to enforcement in the informal sector
• The role of law and prosecution in reducing the prevalence of labor exploitation and abuse
• Coordination and institutional strengthening to prevent labor exploitation and abuse

We found that the Bangladesh Labor Act (BLA) does not provide a comprehensive mechanism to deter labor exploitation and may block workers from engaging with union activities. Gaps in the legal framework pose risks to occupational health and safety (OHS) and the employment rights of workers with disabilities.

Most importantly, the existing legal framework allows for non-standard hiring arrangements, which have direct implications for the informal sector. The prohibition of child labor in the BLA contradicts a provision that allows 12- to 14-year-olds to be employed in “light work.” The informal sector lacks labor law enforcement, often resulting in violations of workers’ rights and child labor protections.

We found that the primary labor inspection body, the Department of Inspection for Factories and Establishments (DIFE), is not adequately empowered because the BLA lacks significant penalty and fine mandates. Capacity gaps in inspection agencies lead to insufficient enforcement, and they lack the power to directly and immediately fine non-compliant factories. The result is that factory owners perceive the consequences of non-compliance are not severe enough to bear the costs of compliance.

We also found that informal garment workers may not be aware of their rights regarding wages, overtime hours, and workplace safety. They also lack the power, resources, and knowledge to file cases against non-compliant employers.

Apparel buyers often increase orders with fast turnaround times without re-evaluating factory capacity. This creates a gap that is often closed by first-tier factories turning to unauthorized subcontracting—garment factories that may not be authorized for production by the buyer or brand, are therefore subject to almost no regulation or oversight, and are typically noncompliant with minimum standards for safety and workers. Our research suggests brands could increase transparency in their supply chains to encourage better compliance with worker safety standards, even in smaller, informal factories that are likely operating as unauthorized subcontractors.

For the private sector apparel supply chain and human rights-focused international brands, protecting the hidden and vulnerable informal RMG workers requires recognizing that:

• Social audits and compliance checklists are poorly suited to fragmented, informal production systems. Relying on audits and checklists can create a false sense of confidence since informal factories are not inspected.
• Unrealistic lead times, price pressure, and order volatility are not neutral business decisions. These decisions can be drivers of labor exploitation—there is a direct link between excess orders and unauthorized subcontracting.
• Weak labor enforcement is not just a governance issue—it directly shapes private sector risk exposure. In Bangladesh, DIFE lacks inspection authority, staffing, and sanction power. Fines are too small to deter violations. In weak enforcement contexts, brands’ leverage to require enforcement matters more.
• Brands cannot replace governments. However, brands can improve subcontractor transparency, adjust their purchasing practices, and align with national binding frameworks.

Our findings suggest that the government and international brands can implement policies that increase compliance with labor laws, decrease exploitation and risks to labor—especially in the informal RMG sector—and improve workers’ awareness of their rights. For the country, this signals an adherence to international standards and protocols and a possible increase in export earnings. For the private sector, it decreases human rights risk since informal subcontracting thrives where enforcement is limited and supply chain transparency stops at first-tier factories.

Audits were never designed to capture fragmented, informal production networks, but other tools and oversight mechanisms can help safeguard workers’ rights and prevent child abuse.