Investigators from the Wage and Hour Division announced last week that Justar Fashion, a contractor in South El Monte in Los Angeles County failed to pay minimum wage and overtime as required. Instead, the supplier, which the agency said made clothing for Stitch Fix, Indigo and Evereve, compensated workers on a piece-rate, or at times straight-time, basis regardless of the overtime hours they worked.
Justar Fashion, whose listed number has been disconnected, also failed to keep records of hours worked, the DOL said. This violated the minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act. The company will have to return $145,290 to 32 employees.
A DOL spokesperson declined to disclose the specific reason behind the probe, though the agency says it might investigate a company after receiving a direct complaint or a referral, or because of the prevalence of non-compliance by specific sectors or industries.
“The U.S. Department of Labor is committed to making sure garment industry workers receive all of the wages they have earned, including overtime,” said Rafael Valles, Wage and Hour Division assistant district director in West Covina, Calif. “Federal law protects all workers in the U.S.—regardless of where they come from—and we urge them to contact the Wage and Hour Division with any questions related to their wages and hours worked.”
Stitch Fix told Sourcing Journal that Justar Fashion doesn’t produce apparel for the personal styling service and that it’s requesting a correction from the DOL.
Evereve, a Minnesota-based women’s contemporary retail chain that recently debuted its own denim line, said that Justar Fashion makes clothing for one of the third-party brands it sells, not its in-house brand.
“Evereve takes this news very seriously,” a spokesperson said. “We have a zero-tolerance policy for any violation of federal, state or local labor laws and regulations, and we are working with the third-party brand involved to secure legal documentation of the Department of Labor’s resolution regarding this issue.”
Indigo, a women’s wear boutique with locations in Little Rock, Ariz. and Memphis, Tenn., did not respond to requests for comment.
It’s been more than a year since California signed the Garment Worker Protection Act, a.k.a. SB 62, into law, eliminating the piece-rate system and holding buyers liable for any wages their suppliers may owe workers.
The Garment Worker Center, a Los Angeles-based nonprofit that lobbied heavily for SB 62, was not involved in the Justar case, according to communications manager Jonathan Coleman. But the type of wage theft involved has been “common for far too long in the industry,” he told Sourcing Journal.
When the Wage and Hour Division checked the books of 77 randomly selected garment contractors in Southern California between 2015 and 2016, for instance, it found that 85 percent of them owed $1.3 million in back wages to 865 workers.
Brands sourcing from California, which is home to some 45,000 garment workers, must be in compliance with the Garment Protection Act and Fair Labor Standards Act, Coleman added.
Beyond the Golden State, the Garment Worker Center is also pushing for federal reform through the Fashioning Accountability and Building Real Institutional Change—or FABRIC—Act, which has been introduced in both the House and Senate.
The bill, which will protect 100,000 workers nationwide, seeks to mandate hourly pay in the garment industry, eliminate piece-rate pay until the minimum wage is met and establish new requirements that hold fashion brands and retailers accountable for workplace violations. It also seeks to revitalize onshore manufacturing by creating a $40 million Domestic Garment Manufacturing Support Program and establishing a 30 percent reshoring tax credit for garment manufacturers returning production to the United States.
“The momentum and coalition power behind the FABRIC Act continue to grow, and we are confident that its passage will codify significant worker protections, along with new incentives which will extend nationwide,” Coleman said. “The FABRIC Act’s success will provide the Department of Labor with new tools to curb wage theft and exploitation.”