L.A.’s apparel industry has long been closely watched by labor regulators and worker advocates. And the results of a recently announced investigation into labor practices in a downtown Los Angeles apparel factory building is an indication that the scrutiny has not gone away.
Federal and state regulators earlier this month accused 10 contractors at 830 S. Hill St. of violations of labor laws. No charges were filed, but back pay for the workers was paid.
The contractors made clothes destined for sale at retailers such as L.A.’s Forever 21 Inc. and Philadelphia’s Urban Outfitters Inc. The Department of Labor’s Wage and Hour Division said workers in the building’s apparel shops were paid an average of $6.50 an hour, which is below the federal minimum wage of $7.25 and the California minimum wage of $8.
The regulators said an August inspection showed many workers were paid for each piece they sewed or cut and were effectively paid below minimum wage. Garment makers often worked for more than 40 hours a week without overtime pay. The 185 employees received about $326,200 in back wages mostly from the manufacturers that hired the contractor companies. Payments average out to about $1,763.
Contractors including Apple Style Inc., Galilee Fashion Inc. and Sarri Fashion Inc. were targeted in the inspection. No one at the building would discuss the investigation. Nine of the 10 contractors that were targeted have closed up shop.
In addition to Forever 21 and Urban Outfitters, major retailers named by the Labor Department in the announcement of the findings included Aldo Group Inc., Burlington Coat Factory Warehouse Corp., Charlotte Russe Holding Inc., Dillard’s Inc., Frazier Clothing Co. Inc., HSN Inc., Rainbow Apparel Inc., Ross Stores Inc., TJX Cos. Inc. and Wet Seal Inc.
Representatives of Urban Outfitters, Forever 21 and Burlington Coat Factory did not respond to requests for comment.
Ruben Rosalez, the administrator at the Wage and Hour Division’s Western regional office, said this month’s announcement of the sweep’s findings is an effort to engage the retailers. Low retail prices may be pressuring manufacturers and contractors to cut corners, Rosalez said.
“The pricing is being set at the top, and the ones paying the price are the workers,” he said.
In the past five years, the division’s Los Angeles, San Diego and West Covina offices have conducted more than 1,500 investigations, he said.
The retailers named by the Labor Department are several steps removed from the garment-making process. Retailers hire manufacturers to make their items and the manufacturers use contractors.
Randy Youngblood, a labor consultant and chief executive of Apparel Resources Inc. in Yorba Linda says the retailers should not be the focus of the Labor Department’s efforts.
“The contractor is truly the employer,” he said. “The contractor is the one making all the labor decisions. They’re independent business people.”
California adopted more stringent labor laws following a landmark 1995 sweatshop case in El Monte, where more than 70 Thai workers were held in near-slavery, toiling for less than $2 an hour. Still, problems persist.
“The allegations in the mid-90s made manufacturers more aware of how labor violations can affect their businesses,” said Jesse Atilano, president and chief executive of Labor Law Inc. in Commerce, which provides consulting for employers. “If they lose a dollar, they can replace that. If they lose their reputations, they’ll never recover that.”
The El Monte episode helped spur legislation to expand regulation of labor practices in the city’s apparel-making industry. The state law that was created in 1999 pertaining to the garment industry, AB 633, extended liability for labor law violations to manufacturers and retailers.
Kimi Lee, who was the executive director of the Garment Worker Center from 2000 to 2009, said the El Monte incident gave “everyone a kick in the pants” to take action on sweatshop labor. “It was the case that really brought people together to do something.”
California Fashion Association president Ilse Metchek said such rules have been effective.
“For the most part, it has kept the significant brands out of problems like these,” Metchek said. “The legitimate parts of the factory are extremely well regulated.”
Though regulations have helped since the El Monte incident, Lee said, further improvements need to be made in the apparel industry’s labor practices.
“The issues of not being paid properly or getting breaks and proper documentation are similar to what garment workers are facing today,” Lee said.
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