Dive Brief:
- Current and former employees at THINX, a multimillion-dollar underwear startup, revealed the firm routinely underpays and mistreats its staff, reports CNBC. The revelations stem from an expose by the fashion news site Racked on THINX and its founder and then CEO Miki Agrawal.
- According to CNBC, besides being paid way below market rates, the workers were scolded when advocating for higher wages. One employee said she accepted pay cuts, and another said she worked excessively long hours for dismal pay. THINX doesn’t have a dedicated HR representative. Agrawal reportedly handled the company’s HR functions, says CNBC.
- None of the workers have agreed to go on the record with their complaints out of fear of retribution, wrote journalist Hilary George-Parkin for Racked. She reports that Agrawal has since stepped down as CEO and that 10 people have left the firm’s 35-member staff.
Dive Insight:
Companies often pay relatively low wages as startups. But THINX is lauded for reaching the multimillion-dollar mark, making these accusations particularly harsh.
In an age where more employers are expected to follow pay equality measures or some sort of diversity initiative, this is a back step. Even if a company can't afford raises, which is realistic for a younger startup, being transparent and respectful about it is key to keeping employee trust high.
Typically, workplaces with at least 100 employees have a dedicated HR practitioner. But the kind of workplace THINX employees describe needs HR expertise to protect employees’ wages, keep the firm compliant with employment laws and help create a positive company culture that respects and engages its workers. It's a common Silicon Valley problem to assume HR isn't needed.
