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Nearly 1/3 of Surveyed CA Garment Contractors Paying Illegal Piece-Rate Wage

Nordstrom, Dillard’s and Neiman Marcus are among the well-known retailers supplied by some of the 50-plus apparel producers responding to a federal survey investigating California’s garment sector that uncovered ongoing wage and labor violations.

More than 80 percent of the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) investigations found evidence that garment suppliers ran foul of the Fair Labor Standards Act, according to the WHD’s 2022 Southern California Garment Survey released Wednesday.

More than half of the investigations found employers were paying workers part or all of their wages “off the books” by forging payroll records or failing to provide them. Nearly one-third of contractors continued using a piece-rate pay model, which has been illegal since California implemented the Garment Worker Protection Act in January 2022. One contractor paid its workers as little as $1.58 per hour.

Suppliers in the survey produce apparel for national retailers, brands and online sellers including Nordstrom, Von Maur, Dillard’s, Neiman Marcus, Lulus, Stitch Fix, Socialite and Bombshell Sportswear, according to WHD. Last year, investigations by the division’s Southern California district offices in Los Angeles, San Diego and West Covina recovered more than $892,000 in back wages and liquidated damages for 296 workers. WHD got contractors and manufacturers to agree to monitor their activities for FLSA compliance.

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WHD also discovered that manufacturers aren’t paying contractors enough to ensure that contracted workers are paid the legal minimum wage. The survey found that the average sewing fee was $2.75 below the amount necessary per garment for contractors to comply with federal wage standards. Compliant contractors received higher per-garment sewing fees ranging from $17.50 to $35.

Garment workers, the California Division of Labor Standards Enforcement, the California Division of Occupational Safety and Health, representatives from state and local attorneys general, the Garment Worker Center (GWC) and Bet Tzedek Legal Clinic joined an L.A. listening session on Wednesday where the WHD released the report.

Garment Worker Center director Marissa Nuncio spoke at the DOL listening session on Wednesday.
Garment Worker Center director Marissa Nuncio spoke at the DOL listening session on Wednesday. Garment Worker Center

“The findings we’re seeing here today clearly demonstrate ongoing wage theft, which is something we hear from our members, who have had to sustain a variety of fluctuating material circumstances since the onset of Covid,” GWC director Marissa Nuncio said at the meeting. “Like the data suggests, there are both signs of growth and change, and some of the usual suspects demonstrating familiar patterns of exploitation.”

Nuncio credited the DOL and WHD for scrutinizing non-compliant producers. “It’s crucial that they have a dedicated garment unit and that they conduct these ongoing investigations,” she added. “We also believe the agency needs more authority to enforce the existing laws, and we’re here to support that effort.”

The GWC advocates for federal legislation like the FABRIC Act and its goal of greater industry accountability. If it succeeds in California, the law would enhance the Garment Worker Protection Act, Nuncio said. “Though DOL’s findings show wage theft continues, we know that with time and strong enforcement, legislation such as this will create change in this industry,” she said.

“We want to build towards cohesion between state and federal law, which streamlines enforcement, which in turn is ultimately better for both agencies and workers,” she added.

“Despite our efforts to hold Southern California’s garment industry employers accountable, we continue to see people who make clothes sold by some of the nation’s leading retailers working in sweatshops,” said Ruben Rosalez, Regional Wage and Hour Administrator in San Francisco. “Many people shopping for clothes in stores and online are likely unaware that the ‘Made in the USA’ merchandise they’re buying was, in fact, made by people earning far less than the U.S. law requires.”

 “The findings of the Southern California Garment Survey highlight why greater outreach and stronger enforcement are needed to combat the inequities that exist in the garment and fashion industries,” Rosalez added. “The Wage and Hour Division will continue to work and meet with advocates and industry stakeholders, and remain focused on holding accountable the manufacturers and retailers who reap significant profits while the people who did the hard work are too often not paid their rightful wages.”

Nordstrom, Von Maur, Dillard’s, Neiman Marcus, Lulus, Socialite and Bombshell Sportswear did not respond to a request for comment by the time of publication.

A Stitch Fix representative said the online styling company takes its factory and vendor partnerships “very seriously” and regularly evaluates “workplace conditions, wages, working hours, health and safety, non-discrimination and more through a comprehensive audit process.” A supplier linked to a brand carried by the subscription box service, Justar Fashion, a contractor in South El Monte in Los Angeles County, was cited last fall for failing to pay minimum and overtime wages.