IR #98-30
Tuesday, August 11, 1998

Rick Rice
Dean Fryer
(415) 972-8835


SAN FRANCISCO --Governor Pete Wilson yesterday signed SB 1514 (Solis), sponsored by the Department of Industrial Relations, which will help further level the playing field for law-abiding garment manufacturers in California.

"Under current law, only garment manufacturers who are considered to be employers are penalized for violations of the rules specific to the garment industry and those governing wages, hours and working conditions," said DIR Director John Duncan. "This law will close that loophole, creating a $500 civil penalty for individuals who have no direct employees but contract work out to unregistered shops that violate the laws."

Garment manufacturers are subject to civil penalties if they fail to register as a garment manufacturer, fail to maintain wage and hour records for three years, and fail to comply with any judgment due for violation of labor laws within fifteen days. Also, manufacturers who contract for services with an unregistered contractor are held jointly liable for all unpaid wages and certain penalties. No penalties are specified for manufacturers who contract to have garments manufactured without directly employing workers. Consequently, these manufacturers have a competitive advantage over other, legitimately operating employers.

"In the long run, unfair competition undermines the economic health of the industry and lowers the employment conditions of the workers," said Duncan, "This law will rectify a situation that was blatantly unfair to law-abiding manufacturers."

The new law will take effect on January 1, 1999.

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