IR #2005-27
Thursday, June 9, 2005

Dean Fryer
Renée Bacchini

Labor Commissioner closes down garment shops: Licenses REVOKED

SAN FRANCISCO - The California Department of Industrial Relations' Division of Labor Standard Enforcement (DLSE) has revoked two garment manufacturing registrations, Korea Sewing Machine, Inc. (Korea Inc.) and Young Crystal, Inc. (Crystal Inc.) for their complete disregard for California's wage and hour laws. A total of $29,500 in citations was issued for, among other violations, failure to maintain records, and pay minimum and overtime wages. The revocations were effective May 31, 2005, and the companies were ordered to surrender their garment registration certificates immediately to the licensing unit of DLSE. Additionally, DLSE denied renewal of two other garment manufacturers, DNK Fashion Inc. (DNK) and Cicci Inc. (Cicci) on similar grounds.

"The underground economy has plagued and undermined legitimate businesses for far too long," said Donna M. Dell, State Labor Commissioner. "We must be consistently vigilant and aggressive in protecting the rights of California workers. Companies that show no regard for labor compliance in California not only violate the law but more often than not take advantage of their employees."

In the case of Korea Inc., there had been clear documentation and witness testimony showing their indifference to the wage and hour laws. An investigation found the company ignored five issued citations totaling $8,050 for violation of various labor code sections. An additional citation in the amount of $1,100 was issued for failure to pay overtime. The company owner also provided misleading information in his application for a garment registration with the intent to defraud the labor commissioner. To date, the citations have been completely ignored and the company continues to operate its business in violation of California labor law.

A manager for Crystal Inc. admitted that time records were not maintained and a citation for $4,100 was issued. Further investigation revealed that the company failed to pay minimum wage or overtime and did not issue employee wage statements. These additional violations resulted in penalties totaling $21,500. Crystal continued operating without appealing the citations or paying the penalties and had shown lack of character in its blatant disrespect for California's wage and hour laws. Garment manufacturers can lose their registration due to lack of necessary character, competency and responsibility. The behavior of both Korea and Crystal fit the profile for revocation.

"Revocations are the strongest tool we have and will be used against manufacturers who have complete disregard for the law," added Dell. "We hope to send a strong message to violators in every industry that indifference to labor law and violations of employees' rights will not be tolerated."

In a similar matter, DLSE denied renewal registration applications for garment manufactures DNK and Cicci, also known as Cotty Fashion. DNK violated record keeping requirements, denied DLSE access to its employment and business records and made false statements on its renewal application. Cicci simply failed to appear at an April 13, 2004 hearing. The character, competency and responsibility of these companies were also found lacking and they were not complying with the law, and as with the previous cases, resulting in denial of their application renewals.

In California, regulations governing wages, hours, and working conditions are laid out in the Welfare Commission wage orders, which must be available at the worksite where employees can read them. Employers can access the Industrial Welfare Commission wage orders or other workplace postings on the line at , click on workplace postings in the left navigation bar.