Nike monitoring Malaysian factory after abuses

SAN FRANCISCO (Reuters) - Nike Inc (NKE.N), the world's largest maker of sports footwear and apparel, said on Friday it was putting a Malaysian contract factory on "red alert" after an investigation revealed workers living in substandard housing and wages being garnished.

Allegations of abuse at the Hytex Apparel factory, which has made garments for Nike for 14 years, were first raised in the media, Nike said.

"Our investigation confirms serious breaches of Nike's Code of Conduct at the Hytex factory," said Hannah Jones, vice president of corporate responsibility for Nike, in a statement.

The factory employed some 1200 workers who met minimum age requirements, but were living in "unacceptable" housing and whose passports were withheld, Nike said. Additionally, the factory garnished workers' wages, the company said.

The Hytex factory supplies T-shirts to Nike and other apparel brands.

The factory will be subject to additional monitoring from Nike as orders to change policies are implemented, Jones said.

Migrant workers will be reimbursed for fees related to employment including agent and work permit fees, and workers who wish to return home will be given return air fare, Nike said.

Workers, who will move into Nike-approved housing within a month, will be given free access to their passports and to a 24-hour Nike hotline in case of future passport withholding, the company said.

Closing the Hytex factory would be a last resort for Nike, Jones said. "If we cut a factory, we lose our influence to force them to change," she said.