Bill to stop clothes companies from stealing garment worker wages passes California Assembly

Factory owners in California’s garment industry have gotten away with illegally paying workers below-minimum wages for decades.

A bill that cleared a major hurdle in the Assembly on Wednesday aims to change that, requiring apparel factories to pay garment workers an hourly wage and aiming to hold big businesses accountable for labor practices under their watch. SB 62 will head back to the state Senate for final approval before going to the governor’s desk for signature.

By requiring an hourly wage, the bill bans the long-standing piece-rate system — 5 cents to sew a side seam, for instance, or 10 cents to sew a neck — that often adds up to less than $6 an hour, according to a 2016 UCLA study, while allowing employers to still offer productivity-based incentives to workers.

It would also allow workers to claw back stolen wages from big fashion brands and retailers, instead of having to go after the small garment factories that those larger companies hire as subcontractors to keep costs low. Those small factories often shut down and disappear before workers can reclaim their due.

Garment workers, labor advocates and more than 100 fashion businesses that have endorsed the bill say that the change is overdue in an industry where 85% of workers are illegally paid below the minimum wage, according to a federal Department of Labor survey.

“It’s 2021, we’re fighting for workers to earn a minimum wage and holding the people responsible who are making profits off of their low pay,” said Assemblymember Lorena Gonzalez, one of the bill’s principal coauthors, in her closing statements before the vote. “The time has come to ensure that garment workers have basic human dignity.”

A 2017 California law applied similar standards to the construction industry, mandating that workers could seek unpaid wages from a general contractor even if a subcontractor was the one who stiffed them, and last year’s SB 1399 sought to make the same changes for the garment industry before dying in the Assembly.

“We’re thrilled about this victory and are hopeful about the prospect of ending the egregious wage theft and exploitation that big brands have incentivized in the fashion industry,” said Marissa Nuncio, director of downtown L.A.’s Garment Worker Center. The center was one of the bill’s co-sponsors and has been advocating for changes that hold retailers and brands responsible for practices along their supply chains.

The bill will return to the state Senate for a final vote to approve the amendments that were added in the Assembly, the most significant of which was a compromise with the bill’s opponents that removed liability for damages and penalties for brands and retailers. “Achieving brand accountability for unpaid wages alone would still be sweeping change, given that there’s no liability right now,” Nuncio said, “but we thought it was important to try to come to some middle ground there.”

Besides the compromise on the bill’s language, Nuncio credits its success after the failure of last year’s SB 1399 to the effects of the COVID-19 crisis, which resulted in other legislation getting priority in 2020, and to the continued efforts of the bill’s backers to build support for the law. In the last year, the number of businesses supporting the change increased from 55 to more than 150, Nuncio said.

Many fashion brands and trade groups had said that the bill was a step too far, arguing that companies should not be held responsible for working conditions and stolen wages at third-party companies that they hire to make their clothes.

The California Chamber of Commerce put the bill on its “job killer” list, and trade groups say that the change could lead companies to outsource work to other states or countries with fewer labor protections.

SB 62 would update labor reforms passed in 1999 that made brands liable for wage violations by the contractors that produce their garments. That law was motivated in part by the incident four years earlier in which 72 undocumented Thai immigrants, who were essentially enslaved, were freed in a raid on an El Monte sweatshop complex.

The 1999 law created “proportional liability,” meaning brands are on the hook to pay only the portion of lost wages corresponding to the garments the worker produced for them.

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Labor advocates said that the increasingly layered use of contractors over the last two decades has made it harder to enforce the law, and that SB 62 provides crucial updates to language that more clearly defines which entities are considered liable and bolsters authorities’ ability to conduct inspections.

SB 62 proposes that fashion brands be held legally responsible for the full amount of harm done to a worker, even if other brands were also responsible in some part for that harm, functionally making them accountable for any work performed within their supply chain.

Once the worker is wholly compensated, fashion labels could negotiate among themselves to ensure each entity pays its corresponding share. To protect their financial interests, brands might begin to require that contracted producers carry bonds or insurance to cover any wage claims.