TIPP's Enforcement Success Continued in Second Year;
Joint Effort Becomes Permanent

The Targeted Industries Partnership Program (TIPP), created to attack labor law violations in the agriculture and garment industries, noted improved conditions during 1994.

TIPP began operation in November, 1992 as a result of a recommendation by the Governor's Farm Worker Services Coordinating Council. The Council had been created by Governor Pete Wilson in 1991 in response to a devastating freeze that year that destroyed crops and left many farm workers without work or necessary support. As a result, the Council recommended a targeted multi-agency approach to enforcement of labor laws and health and safety requirements.

Two of the lead agencies in TIPP are part of DIR: the Division of Labor Standards Enforcement (DLSE) and the Division of Occupational Safety and Health. The other lead agency is the U.S. Department of Labor. Other state agencies, such as the California Highway Patrol and the Employment Development Department, and local agencies have participated in TIPP as needed.

TIPP seeks to obtain employer compliance with all applicable state and federal wage and hour and health and safety laws through a combination of joint educational outreach efforts, joint investigations and enforcement, and sharing of information and resources by the agencies working as a team.

The joint enforcement effort has focused on the agriculture and garment manufacturing industries because of their well-documented histories of labor abuses. In 1994, the program continued its focus on these two industries. The TIPP effort has resulted in greater and more cost effective enforcement.

In 1994, as a result of TIPP, a record amount of unpaid wages was recovered from employers in the garment manufacturing industry. TIPP's lead agencies conducted 152 audits, collecting and paying to garment workers nearly $2.16 million in unpaid wages. Another $630,000 in unpaid wages due garment workers remains in various stages of litigation in cases where the Labor Commissioner is taking civil action against garment manufacturing employers to recover unpaid wages and overtime pay.

On the agriculture side, TIPP partners conducted 54 audits and collected $414,557 in unpaid wages on behalf of farm workers. An additional $453,467 remains in litigation.

TIPP's compliance and enforcement activities during 1994 consisted of 1,089 inspections in the two targeted industries -- with 500 inspections in garment manufacturing and 589 inspections in agriculture. The total inspections increased slightly from 1993, when 1,061 inspections were conducted in both industries.

A noteworthy development during 1994 was the decrease of serious

violations found in the agriculture industry, with the exception of minimum wage violations. The Labor Commissioner attributes this improvement to the extraordinary educational effort on the part of the agriculture industry to make voluntary compliance with labor laws achievable, as well as better targeting of egregious violators of the state's labor laws. This educational effort consisted of industry-sponsored educational seminars, improved employee access to information concerning farm workers rights (including a card-sized summary of worker rights produced and distributed by the Labor Commissioner), and the production and dissemination of training materials and videotapes.

In the garment manufacturing industry, a recent discrimination case highlights the support from employees given to ongoing TIPP efforts. On November 4, 1994, two former employees of SS Fashion Inc. filed complaints with DLSE alleging they were unlawfully discharged from their jobs after cooperating with state and federal investigators during a garment inspection conducted under the TIPP program. The employees alleged that the primary motivating factor for their ouster was an attempt by the employer to prevent them from testifying in support of the TIPP investigators' citations issued against their former employer.

On December 9, 1994, Steven C. Pahel, Deputy Labor Commissioner and Discrimination Complainant Investigator, began an investigation to determine the validity of the employees' allegations. On May 30, 1995, as a result of Pahel's in depth investigation, a settlement was reached by all parties. The settlement consisted of owners of SS Fashion ceasing and desisting from any discriminatory activity which is prohibited under Labor Code Section 98.6; and reimbursement of lost wages totaling $3604. Each Complainant will receive $1802.00.

TIPP personnel also routinely conduct educational seminars for agriculture employers. When TIPP first began in late 1992, the first such seminar in the Central Valley attracted only 13 people. Now, TIPP educational seminars sometimes attract several hundred participants.

From its inception, TIPP suffered from the Goldielocks reaction, in which some interests considered it too hot and other interests saw it as too cold. Agriculture employers viewed it as too strong and stringent an approach, although no new laws were involved and the TIPP effort simply involved a new joint enforcement approach. Advocates for agricultural workers, on the other hand, viewed the effort as too weak.

Perceptions of TIPP have changed. The proactive effort on the part of the agricultural industry during the second year of TIPP was a definite change compared to the first year. Through the persistent efforts of enforcement and educational outreach activities, it became apparent that the TIPP effort was real and permanent. Agricultural employers have realized that TIPP plays a crucial role in creating and maintaining a level playing field among employers. Employers who ignore labor laws, such as not paying minimum wage or carrying adequate workers' compensation coverage, competitively undercut law-abiding employers. Agriculture employers also have indicated an intolerance for employers in the industry who deliberately violate labor laws.

In agriculture, the TIPP effort has produced the highest level of compliance with state and federal minimum labor and field sanitation standards in California history. Likewise, in the garment industry, educational and enforcement efforts have resulted in clothing firms shifting work toward contractors who follow the law and away from manufacturers found to violate labor laws. Over the past year, many law-abiding garment manufacturers have reported increases in work to the Labor Commissioner, an indication of such a trend.

In an effort to improve the collection of civil penalties assessed by the Labor Commissioner, the DLSE entered into a Memorandum of Understanding (MOU) with the Franchise Tax Board (FTB) on June 23, 1994. Now, when civil penalties are due and payable, the FTB undertakes collection as a tax enforcement agency. This agreement resulted from criticism of the amount of penalties collected by the Labor Commissioner; however, the FTB has not had much greater success.

Based on the success of its multi-agency joint effort, TIPP continually seeks other partners whose resources and information could enhance TIPP enforcement and education efforts. Last year, the Labor Commissioner entered into a MOU with the Internal Revenue Service (IRS). This agreement does not involve the IRS in TIPP enforcement activities. Instead, the IRS notifies the Labor Commissioner of any unaddressed tax liabilities by farm labor contractors. The Labor Commissioner, in turn, withholds renewal of farm labor contractor licenses for such employers until the liabilities are satisfied. A similar effort previously existed between the Labor Commissioner and EDD, which has responsibility for collecting employer taxes in California. The joint effort with the IRS will be expanded to the garment industry in the coming year. By law, all garment manufacturers must be licensed with the Labor Commissioner.

When it began in November, 1992, TIPP was launched as a two-year pilot effort. Based on its success, DIR and the U.S. Department of Labor have signed a MOU making the effort permanent and agreeing to cover other industries and occupations if both parties agree.