The businesses cited employ 170 workers in the Los Angeles garment district. The penalties included $275,835 in fines and stop orders for seven employers operating without workers’ compensation insurance coverage.
Fourteen businesses were cited $34,300 for garment regulation violations, including failure to register as a garment manufacturer, display the garment registration or maintain required records. Investigators also confiscated 5,725 illegally manufactured garments with an estimated street value of $103,000 from six of the businesses.
“Garment manufacturers who thwart the law threaten workers’ rights and undermine honest employers in the industry, making it difficult for legitimate businesses to succeed,” said Labor Commissioner Julie A. Su. “These illegal entities should take note: We will shine a light on the underground economy and those who contract with unregistered contractors will also be held accountable.”
The Labor Commissioner’s office is also pursuing wage theft investigations on those employers who failed to pay proper wages under the California Labor Code. The Garment Manufacturing Act of 1980 requires that all industry employers register with the Labor Commissioner and demonstrate adequate character, competency and responsibility, including workers’ compensation insurance coverage.
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Garment manufacturers who contract with unregistered entities are automatically deemed joint employers of the workers in the contract facility. Clothing confiscated from illegal operations cannot be sold, and will be donated to a non-profit agency that will provide the items to homeless and domestic violence shelters in the Los Angeles area.
[Read more about industry labor problems: Report: Actionable Ways Brands Can—And Should—Fight Forced Labor]
The Labor Commissioner also administers a special wage claim adjudication process for garment workers pursuant to a law passed in 1999. This law provides not only an expedited process for garment workers to file wage claims, but also provides a wage guarantee where garment manufacturers are responsible for wage theft at their contractors’ facilities.
The law came in the wake of the infamous 1995 scandal involving seven sweatshop operators who recruited seamstresses from Thailand and kept them imprisoned in an El Monte, California garment factory ringed with razor wire.
The shocking case, which exposed sweatshop conditions in the U.S. that were thought to have been long eradicated, made headlines when officials invaded the compound and liberated 72 Thai workers. Garments produced at the El Monte site were traced to retailers that included Mervyn’s, Macy’s and Filene’s, authorities said.
In the atmosphere of outrage after the sweatshop’s discovery, federal and state officials vowed broad reforms targeting contractors, manufacturers and retailers who profit from sweatshop labor.