Governor Gavin Newsom signed a new law on September 27, 2021, that will put into effect new wage and hour requirements for workers employed in the garment industry. The new law, SB 62, bans piece-rate pay for garment workers and requires employers to pay these workers an hourly minimum wage. This law also expands the categories of workers included in the definition of garment worker along with who is liable for wage and hour violations.
For the purposes of this law, garment workers include those who cut, make, sew, repair, assemble, finish, process, dye, place a label on a garment, alter the design of a garment, cause someone else to alter the design of a garment, or prepare wearing apparel, a garment, or accessories meant to be worn.
People who enter a contract to have garments manufactured are liable along with manufacturers, contractors, brand guarantors, and possibly some retailers for attorney’s fees, unpaid wages, and civil penalties that are a result of Labor Code violations. The violation also results in compensatory damages of $200 per employee per pay period in which an employee is paid by the piece for which these violators are jointly responsible.
SB 62 bans piece-rate pay. Employers may give incentive bonuses but must pay all employees at least the minimum hourly wage. Also, the requirements for overtime compensation are the same.
Record-keeping requirements have also changed under the new law. Under SB 62, all businesses in the garment manufacturing chain must keep any documentation connected to the garment manufacturing performance for four years. This includes purchase orders, invoices, contracts as well as any other documents related to the process. Brand guarantors are subject to this requirement as well.
There is no private right of action in this law, but garment workers may file a claim with the California Labor Commission, and presumption of liability is not hard to establish. Additionally, little evidence is required for workers to prove their case, and the hearing process is difficult for respondents. The law has a rebuttable presumption that the contractors, garment manufacturers, and brand guarantors are all responsible for any money owed to the employees. The Labor Commissioner also has the authority to issue a citation or stop order.
With the heavy liability and penalties that may come with violations, companies employing any garment workers in California should audit their current wage system and take steps to comply. Additionally, it is important to inquire with any contractors as well to ensure that they also are in compliance due to the mutual responsibility this law creates.