Students and staff at the University of Wisconsin-Madison are calling on sporting goods brand Adidas to make severance payments to workers at an Indonesian factory after its owner fled.

The university's Labor Licensing Policy Committee (LLPC) says that unless Adidas makes the payments it will take steps to terminate sponsorship and licensing agreements with the sportswear firm, which has an exclusive contract to provide uniforms and athletic equipment.

The dispute relates to Adidas Group subcontractor PT Kizone in Curug, Indonesia, whose owner fled without paying more than 2,800 workers around $3.2m in severance. The amount equals nearly one year's salary per worker, at minimum wage - that the workers were legally owed according to Indonesian law.

Goods in the factory were allegedly produced on behalf of several major apparel brands, including Nike, Adidas and the Dallas Cowboys.

For its part, Adidas has argued that the owner of the factory is responsible for severance pay. It also says it supports efforts to find new employment for the Kizone workers, as well as the elimination of illegal factory closures and the flight of foreign owners.

But university students and staff claim the Adidas Group's response has been "insufficient."

"Failure to pay severance owed to workers is the single largest problem with the global apparel industry; over $500m is owed to workers in just the past year," says LLPC chair and consumer science Professor Lydia Zepeda.

"We take these allegations very seriously and are continuing to gather additional information to gain a better understanding of the situation," adds Vince Sweeney, vice chancellor for university relations. "This will enable us to make an informed decision about whether or not Adidas has violated the terms of our licensing code of conduct."

The University of Wisconsin-Madison inked its licensing agreement with Adidas after ending a similar deal with Nike last year over concerns about the way it treated workers at two shuttered factories in Honduras. It also ended a licensee agreement with Russell Athletic in response to perceived breaches of its code of conduct.

The university's current deal with Adidas runs through June 2016 and is worth around $2.5m a year in both royalties and equipment.

As part of university standards, brands and suppliers are required to adhere to a code of conduct that addresses workers' wages, working hours, overtime compensation, child labor, forced labor, health and safety, nondiscrimination, harassment or abuse, women's rights, freedom of association and full public disclosure of factory locations.

If violations occur, a licensee has the opportunity to correct the problem or have its relationship with the university terminated.