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News September 27, 2021

Bill Seeks Minimum Wage for California Garment Workers

SB62 includes language that would extend liability for unpaid worker wages to brands, including retailers and promo products firms, that source from California apparel manufacturers.

By  Christopher Ruvo

UPDATE Wednesday, Sept 29, 2021
California Gov. Gavin Newsom has officially signed the bill into law. The law makes California the first state to eliminate piece work compensation, although there is an exception for worksites covered by collective bargain agreements, the AP reported. It also makes California the first state to create liability for companies that subcontract with garment makers. That liability extension applies to entities like retailers and promotional products suppliers.

A California bill would require garment workers in the Golden State to be paid the minimum wage and expand liability for underpaying apparel factory employees to brands that contract with California-based clothing manufacturers and their subcontractors.

garment factory

That expanded liability, intended to help foster humane worker treatment, fair pay and accountability throughout supply chains, would likely extend to promotional products suppliers and distributors that source made-in-the-USA apparel from California garment factories.

California, and the Los Angeles area in particular, is the hub of domestic garment manufacturing. There are more than 45,000 garment workers cutting, sewing and finishing apparel in the Los Angeles area.

The California State Legislature recently voted to pass the Garment Worker Protection Act. Now, the bill awaits signature from Gov. Gavin Newsom.

Senate Bill 62, as the bill is also known, would prohibit garment workers from being paid by the piece rate system – a common practice in the industry in which workers are compensated per garment sewn. Critics say the system leads to frequent exploitation and underpayment.

Instead, employers would have to pay workers the California minimum wage of $14 for companies with 26 or more employees, or $13 for companies with 25 or fewer employees. By January 2023, the minimum wage in California for all organizations will be $15.

California State Sen. Maria Elena Durazo spearheaded and introduced SB62.

As long as a garment worker is paid minimum wage, piece rate payments can be used as additional compensation to encourage productivity, according to SB62.

“The bill would impose compensatory damages of $200 per employee against a garment manufacturer or contractor, payable to the employee, for each pay period in which each employee is paid by the piece rate,” the text of the legislation reads.

If signed into law, the bill would also make entities that could include retailers and apparel suppliers/direct-sourcing distributors in promo jointly liable (along with the manufacturers) for unpaid wages that are owed to a California garment manufacturing worker.

This liability further down the supply chain would stand regardless of whether the garment producer with which the retailer/supplier/distributor contracted performs the apparel manufacturing or subcontracts it out. Beyond cutting, sewing and the like, garment manufacturing also includes dyeing, altering a garment’s design, and affixing a label to a garment, according to the act.

“The bill would also make garment manufacturers and contractors liable for the full amount of damages and penalties for any violation,” SB62 reads.

The law has proponents and critics.

Critics of the SB62 include the California Chamber of Commerce, which calls the legislation a job killer.

Some 158 fashion manufacturers and fashion brands have officially endorsed the Garment Worker Protection Act, including Saitex, a sustainable denim maker for mega brands like Ralph Lauren and Target that produces in LA. Similarly, sustainable fashion brand Reformation, a $100 million company that produces in Los Angeles, supports SB62.

Some apparel-industry experts, like journalist/advocate Elizabeth L. Cline, argue that good wages and strong labor laws are essential for kindling a healthier, larger and more productive domestic apparel manufacturing sector. As such, she supports SB62. “This is undeniably a good thing for workers, for consumers, for taxpayers, for the environment, and for society as a whole,” Cline writes.

Critics of the legislation say that, while well intended, it would make California’s garment sector less competitive, compelling operators to set up elsewhere and wiping out local jobs.

“By transitioning to an hourly wage, the proposed California law creates a disincentive to the goal of being competitive,” writes Rick Helfenbein, the retired chairman of the American Apparel and Footwear Association “It should also be noted that garment factories can reach or exceed the minimum wage under a piece rate system. … The reality is that some legislative ideas sound great on the surface, but digging below and listening to experts in the field would certainly help the political understanding that there are better ways to achieve the same result.”