IR # 96-32
Thursday, August15, 1996

Rick Rice
Troy Swauger
(415) 972-8835

Industrial Homework Investigation In LA Garment Industry Continues

SAN FRANCISCO-- California Labor Commissioner Roberta Mendonca announced today that the investigation of illegal industrial homework in the Los Angeles garment industry, which continues this week by the Division of Labor Standards Enforcement, has now netted three cash payment violations totaling $104,500 in penalties.

Citations were issued last week to Kelly Sportswear of El Monte for $66,000, to Indigo Denim Inc. of Los Angeles for $37,500, and to Select Sewing of South El Monte for $1,000. The citations resulted from audits conducted after state labor investigators searched 14 homes at which it was believed illegal industrial homework was being conducted. Evidence seized at some of the homes was traced back to five contractors, two of which are still under investigation. The investigation has received much attention, partly because many of the brands of clothing found at the sites were linked to well-known manufacturers. Prominent labels among more than 30 brand names found included XOXO, Guess, Rampage, Carole Little, Parallel, Carol Anderson, Bebe, Francine Browner and Judy Knapp.

"We have been very careful to point out that the contractors involved in illegal industrial homework typically attempt to hide this activity from not only government enforcement officials, but also from the manufacturers for whom they work," Mendonca said. "I wish to emphasize that the focus of this investigation continues to be on the garment contractors who were allegedly sending work home with employees and we have received no evidence to suggest that any manufacturer, linked to this investigation by our discovery of garments or labels at the homework locations, had any knowledge of these illegal activities."

Under California law, garment fabrication must be done in a shop that is legally registered with the state labor commissioner. All of the garment contractors under investigation had been registered, indicating that the manufacturers, in contracting with these registered businesses to produce garments under their labels, had been following California's registration requirements.

"It is encouraging to note that at least one manufacturer, Guess has volunteered to take additional steps to ensure that contractors engaged to produce its products are following the applicable state and federal labor laws," Mendonca said.

Guess announced last week that it would launch a number of new steps to fight contractor violations including retaining a recognized, independent authority to thoroughly review its current contractor monitoring program. Additionally, the company has announced its intentions to provide all of its contractors' employees with copies of the Guess contract and compliance program, translated and explained in their native languages.

"Another decisive step which complements state enforcement efforts is Guess' promise to establish a toll-free number to receive reports of homework violations and to pay a $500 reward to any person whose report is confirmed," Mendonca added.

The investigation began three weeks ago when search warrants were granted by the Court permitting inspectors to enter 14 separate residences. Eight of the residences had industrial homework in production at the time the residences were searched. Investigators were then able to link the evidence seized there to the contractors. The contractors found in violation of the illegal industrial homework provisions of the law may face criminal charges and may also have their garment registrations revoked. The ongoing investigations of the remaining two contractors are expected to conclude by early September.