USA: Wage theft common practice in "Made in the USA" garments manufacturing due to legal loophole & brands business models


Photo by Ed Crisostomo, Orange County Register/SCNG

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8 August 2017

USA: Wage theft & poor working conditions common in LA garment industry

Author: Charles Davis,

"'Made in America': How Sweatshops Exploit Immigrants to Make Your Cheap Clothes." 26 July 2017

Of the 45,000 people who work in Los Angeles' garment industry, the country's largest, over 70 percent are immigrants... In 2016, the U.S. Department of Labor investigated 77 garment companies in the city and found that 85 percent of the time, they cheated their workers... “Los Angeles is the wage theft capital of the country,” Anmie Shaw, outreach coordinator for the Garment Worker Center, told ATTN:. “We know that there are 13 factories that serve as sources of clothing for Ross. And the conditions in most of these places are really terrible..."... When [the Garment Worker Center] interviewed more than 300 garment industry workers as part of a study with the University of California, Los Angeles (UCLA) Labor Center, six out 10 workers complained of “excessive heat” and “poor ventilation” that “rendered it difficult to work, and even to breath.”... These garment factories are not owned by Ross or any other brand, but by subcontractors — that is, contractors for the contractors that these brands hire... And at the prices companies like Ross are willing to pay, [Garment Worker Center organizer] Mariela Martinez argued it's near impossible for these subcontractors to fulfill an order while providing a living wage... In a statement, Ross told ATTN: that... it “takes labor compliance and violations very seriously. We require that all vendors, who are also responsible for their contractors or subcontractors, agree to uphold our ethical standards and abide by all applicable federal, state, local, and international laws.”

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19 December 2016

In L.A.’s garment industry, ‘Made in the USA’ can mean being paid $3 an hour

Author: Jessie Kornberg, Bet Tzedek, on Los Angeles Times (USA)

...the U.S. Department of Labor released a bombshell report that might make you suspicious of clothing that’s “Made in the USA.” After a three-year comprehensive study, the Labor Department confirmed what workers’ rights advocates like me have long contended: Worker abuse and wage theft is rampant in the U.S. garment industry. The report revealed that 85% of garment industry employers studied were violating federal minimum wage and record-keeping laws. More than 660 investigations involving 5,158 workers over three years documented $8,098,988 in stolen wages...The idea that “Made in America” could mean made for $3 an hour might come as a shock in 2016...[Bet Tzedek legal nonprofit] have repeatedly sought Ross, TJ Maxx and Forever 21’s help in addressing wage violations committed by their suppliers — but they have chosen instead to fight us in court, withhold information about their suppliers, and do all they can to keep industry labor practices hidden They are unabashed by the latest Labor Department report. In response, they released statements saying they take the findings “seriously.” There was no condemnation of their contractors. No change in business practice...

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29 November 2016

Why wage theft is common in garment manufacturing

Author: Margot Roosevelt, Orange County Register (US)

…Earlier this month, U.S. Labor Department officials cited three multibillion-dollar retailers, with thousands of stores nationwide, as the worst offenders in setting prices that drive illegal wage theft: Ross, T.J. Maxx and Forever 21…Ruben Rosalez, a U.S. Labor Department regional administrator,.. “I’m sad to say that in 2016, we have sweatshops in America.”…The hunger for bargains comes at a social cost. Retailers set prices they believe consumers want, but their U.S. suppliers can’t begin to manufacture garments at those prices if they pay legal wages, …Officials say federal and state laws allow them to penalize only direct employers…local subcontractors,…are the ones hit with back wages and damages. The manufacturers – middlemen who engage the contractors – are mostly insulated. The retailers who employ the manufacturers escape liability…in an effort to hold department stores and major brands accountable, the U.S. Labor Department launched a new strategy – analyzing supply chain pricing to trace wage theft back to the stores that sell the clothes…Eighty-five percent of the shops were found to be cheating, paying as little as $4 an hour, and an average of $7 an hour – far below California’s $10 minimum wage. Spokeswomen for Ross and T.J. Maxx declined to discuss the investigations. Emailed statements asserted they comply with the law, and they make sure their vendors do, too. Forever 21 did not return calls...

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16 November 2016

Factories that made clothes for Forever 21, Ross paid workers $4 an hour, Labor Department says

Author: Natalie Kitroeff, Los Angeles Times (US)

It can be hard to ignore the lure of Forever 21, where fall jackets go for $18 and a halter dress can be had for $9. But U.S. Labor Department investigators contend that those deals are costly for people like Pedro Montiel, who said he makes $4.50 an hour putting the labels and other finishing touches on blouses for one of the retailer’s suppliers. Montiel is not in a Mexican factory, or in China – he works at a company in the basement of a building in downtown Los Angeles.The department said that from April to July, it investigated 77 local garment companies that were supplying some of the biggest clothing stores in the nation... uncovering labor violations in 85% of the cases...and found that the companies cheated workers out of $1.1 million. The retailers with ties to companies that had the most offenses were Ross Dress for Less, Forever 21 and TJ Maxx. The department said it has penalized the garment companies and some manufacturers that act as intermediaries between the factories and the retailers. Those companies were ordered to pay $1.3 million in lost wages and damages to workers. But the retailers will avoid any repercussions for hiring factories that violate labor laws. The Labor Department can only penalize companies that directly employ workers. Retailers keep their distance from the factory floors by working with several layers of suppliers, lawyers for the government and worker advocates said.

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1 March 2016

A new strategy to stop wage theft in the garment industry: Looking at what retailers pay for clothing

Author: Bryan Watt, KPCC (US)

...the Department of Labor's Wage and Hour Division is trying a new strategy: analyzing the prices retailers pay for clothing, and tracing those prices all the way down the supply chain. This method is helping investigators know which companies in the chain are most at fault...Rosalez's department brought on an expert to study the prices Ross paid YN for wholesale clothing. It also studied the amount YN paid its contractors, who then hired garment stitchers to do the work. The investigators wanted to see if those amounts were sufficient to pay the garment stitchers the minimum wage and overtime for the time it took to complete the work..."The answer is no, nowhere near that," said David Weil, the Wage and Hour Division's national administrator. He explained that the Ross chain was paying about half what it should to YN, and YN was paying about a third of what it should to its contractors...As a result, YN must now pay $212,000 in back wages to 270 employees of its subcontractors. It also must hire an independent, third-party monitor to make sure all of its domestic garment contractors follow overtime, minimum wage and record keeping rules.This new strategy has also become a tool that Weil hopes will bring retailers like Ross into the conversation about wages. Weil says the division has reached out to Ross executives to discuss the problem...In an emailed statement, a corporate spokesperson for Ross Stores said it requires suppliers to uphold ethical standards and that the reatailer already has a dialogue with the Department of Labor...

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