American Apparel Inc. shares lost 9 percent Wednesday after the apparel maker admitted that the government found 1,800 of its employees were either unauthorized to work in the United States or their immigration status could not be verified.

Those employees comprise about one-third of the apparel company’s Los Angeles manufacturing operations.

The disclosure came after results arrived from a U.S. Immigration and Customs Enforcement investigation launched in January. Of the 1,800 workers identified, 1,600 were deemed to be unauthorized to work, while Immigration officials were unable to verify the status of the others.

The company said in a Wednesday press release that it was not found to have willingly hired illegal workers.

If the workers are unable to provide proof of eligibility, they will be forced to leave the company. In a regulatory filing late Tuesday, the company said it could not accurately assess the impact on operations from losing that many workers, but believed it would have no significant impact on its financial results because of current inventory surpluses and excess manufacturing capacity.

American Apparel has long touted its “sweatshop-free” business model and the benefits offered to its workers. Its founder and chief executive, Dov Charney, has been a high-profile advocate of immigration reform, renting billboard space and taking out advertisements on the issue.

“It is the company’s hope and my personal hope as an immigrant myself that these employees are able to confirm their work authorization so that they may continue to work at American Apparel,” Charney said in a statement. “The company remains very proud of its track record as an advocate for the comprehensive reform of the country’s immigration laws.”

American Apparel shares closed down 34 cents to $3.30 on the NYSE Alternet.