IR # 96-14
Wednesday, May 8, 1996

Louis Bonsignore
(415) 972-8835
Rick Rice
(213) 897-7160
(415) 972-8835

State Targets Garment Industry Woes With 5-Point Plan

Los Angeles -- The California Department of Industrial Relations will launch a five-point plan to address compliance problems cited in the latest survey of Southern California's massive apparel industry, director Lloyd W. Aubry, Jr. has announced.

The survey of the Southern California apparel industry, conducted in March and April of this year by the Targeted Industries Partnership Program (TIPP), a joint effort of the California Labor Commissioner's Office and Cal/OSHA (both are divisions of the California Department of Industrial Relations) and the U.S. Department of Labor Wage and Hour Division, was the second to be conducted in the state. The first survey was conducted in 1994 and served as a "baseline" to determine the industry's level of compliance with state and federal labor and workplace safety laws.

"Compliance with labor laws was widely considered the exception rather than the rule when our agencies together began the Targeted Industries Partnership Program four years ago," said Lloyd W. Aubry, Jr., director of the Department of Industrial Relations. "This survey would indicate that the industry has indeed made some incremental improvements in most compliance areas but it also shows that there is some road ahead before law-abiding garment firms are free from the undercutting effects of those who avoid labor, safety and tax laws."

The 1996 survey results show compliance has improved over the past two years in almost every area measured. The percentage of firms violating minimum wage requirements dropped from 61 to 43 percent. Shops cited for overtime law violations dropped from 78 to 55 percent. No shops were cited for child labor violations while the current survey was conducted, compared to 4 percent in the 1994 survey. Only 9 percent of the firms were cited for failure to carry workers' compensation insurance, down from 13 percent before the impact of reforms initiated by Governor Wilson two years ago which made coverage more affordable.

The 1996 survey also reflected a corresponding drop in back wages and penalties collected. Back wages owed workers who were paid less than the minimum wage totaled $1,592, compared to $3,866 in 1994. Unpaid overtime owed workers was $1,643 -- down from $3,418 two years ago. Employers were fined $1,128 for failure to maintain workers' compensation insurance, compared to $4,407 in the previous survey.

With the news of improvement the survey also provided troubling information: Violations for failure to have a valid California registration soared from 11 percent to 33 percent; record keeping violations were down from 74 percent in 1994 but were found to be at 64 percent in the latest survey; cash pay, a staple of underground economic activity, was cited in 33 percent of the shops; and serious workplace safety violations, not previously measured, were found in 72 percent of the shops inspected.

"The survey has provided us with profiles of businesses that, by not complying with laws, are able to undercut their legitimate competition," said State Labor Commissioner Roberta Mendonca. "We are using this data as a tool which will allow us an opportunity to quickly tailor education and enforcement techniques to better address the problems that surface in this fast-growing and ever-evolving industry."

The five-points addressed in the State's plan aimed at the most recent manifestations in the industry are:

"The apparel industry is growing at an astounding rate in California," said State Labor Commissioner Roberta Mendonca. "We understand the importance of this industry's economic contribution to California as well as it's importance to the nation.

"With that in mind," she added, "we are encouraged by the move toward compliance in most areas within the industry that this survey has indicated and we are willing to assist, through our five-point plan, the positive actions of those who strive to make the garment industry a more viable one within the state.

"We will also, wherever necessary, continue to provide the backdrop of highly visible enforcement actions, such as the discovery of the conditions that occurred in El Monte last summer and major industry sweeps like that which we are conducting this week in Los Angeles and Orange County, to thwart those who attempt to violate labor laws at the expense of the entire industry and the American conscience," she said.

Referring to the survey, Department of Industrial Relations director Aubry commented that "It is commendable to note that strides in compliance were seen in sewing shops that are monitored by the manufacturers for whom they contract, either on their own or through an agreement with the U.S. Department of Labor." "This type of creative intervention serves as an indication that what is most needed to bring the industry into better compliance are innovations sponsored by government or industry rather than additional laws," he added.

"Against a framework of intense employer education and enhanced enforcement provided by the Targeted Industries Partnership Program," said Aubry, "and with improvements in monitoring by manufacturers, then we should continue to see a decline in labor violations without burdensome legislative remedies."

Aubry cautioned however that although the federal government has increased efforts to control illegal immigration, the effect of this phenomenon still motivates a decline in labor conditions within the garment industry. "With the survey indicating that 43% of garment shops are still in violation of minimum wage laws," he said, "it is obvious that many workers are accepting less than the current $4.25 per hour minimum rate, and very often these are people who hesitate to seek governmental intervention on their behalf for fear of repercussions."


(Editor's Note: A copy of the 1996 Garment Industry Survey is available by contacting the California Department of Industrial Relations, Public Information Office at (415) 972-8844.)