Garment Worker Protection Act Frequently Asked Questions
Senate Bill 62, also known as the Garment Worker Protection Act, is effective starting on January 1, 2022. The new law addresses proper payment of employees in the garment industry and the responsibility for parties contracting to have garment operations performed.
- Who is a contractor under the Garment Worker Protection Act?
- Who is a garment manufacturer under the Garment Worker Protection Act?
- What are garment manufacturing operations?
- Who is a brand guarantor under the Garment Worker Protection Act?
A contractor is generally the garment factory employing garment workers. It can be any person, including business entities, who primarily engages in garment manufacturing operations with the assistance of employees or others.
A garment manufacturer generally contracts with the contractor to have garments made. This term includes any person engaged in garment manufacturing who is not a contractor.
To be engaged in garment manufacturing means to perform garment-manufacturing operations for sale or resale or to contract with a contractor to have those operations performed.
Garment manufacturing operations refer to the preparation of any garment or any article of apparel or accessories designed or intended to be worn by any individual for another person, such as: sewing, cutting, making, processing, repairing, finishing, assembling, dyeing, altering a garment’s design, causing another person to alter a garment’s design, or affixing a label on a garment. Garments include but are not limited to clothing, hats, gloves, handbags, hosiery, ties, scarfs, or belts.
A brand guarantor is any person contracting for the performance of garment manufacturing operations regardless of the layers between the brand guarantor and the contractor. It includes persons that license a brand or name for garment manufacturing.
Elimination of the Piece Rate
- Are employers in the garment industry allowed to pay a piece rate?
No. Starting January 1, 2022, employees engaged in garment manufacturing must be paid an hourly rate not less than the minimum wage. They cannot be paid a piece rate. Employers that pay the piece rate and manufacturers that contract with them will be liable for compensatory damages of $200 per employee per pay period.
There is an exception for employees covered by a collective bargaining agreement if the agreement expressly provides for:
- Wages, hours of work, and working conditions of the employees.
- Premium wage rates for all overtime hours worked and a regular hourly rate of pay for those employees of not less than 30 percent more than the state minimum wage.
- Stewards or monitors, and a process to resolve disputes concerning nonpayment of wages.
Yes. The law specifically allows employers to offer incentive-based bonuses. For more information regarding bonuses, please consult the Labor Commissioner’s Enforcement Policies and Interpretations Manual section 35
Liability under the law
- Under the Garment Worker Protection Act, can persons or businesses in the garment industry be liable for violations of the California Labor Code even if they are not the employer?
Yes. Contractors, Manufacturers, and Brand guarantors are jointly and severally liable for:
- The full amount of unpaid minimum, regular, overtime, and other premium wages, reimbursement for expenses, and any other compensation, including interest, due to any and all employees who performed the manufacturing operations for any violation of this code.
- The employee’s reasonable attorney’s fees and costs.
- Civil penalties for failing to secure valid workers’ compensation coverage as required by Section 3700.
Contractors and manufacturers are liable for their proportionate share of all damages and penalties owed to the contractors’ employees.
Although the Garment Worker Protection Act expanded this liability, manufacturers before January 1, 2022 were still liable for their proportionate share of minimum and overtime wages owed to employees along with liquidated damages and attorney’s fees under particular circumstances.
This means if the Labor Commissioner determines that a contractor’s employees are owed wages, the contractor, manufacturer, and brand guarantor are all liable for the full amount of wages owed for any time period in which the manufacturer or brand guarantor was contracting to have garment operations performed by the contractor. The same joint and several liability applies when a contractor is found not to have workers’ compensation insurance or is determined to owe attorney’s fees to an employee.
If an employee collects the full amount of owed wages from a brand guarantor after filing a claim, the employee is not entitled to collect from the contractor or manufacturer.
Nothing in the Garment Worker Protection Act prevents a contractor, manufacturer or brand guarantor from establishing, exercising or enforcing a right to contribution or indemnity against each other in separate proceedings after a final judgment.
To determine each manufacturer’s proportionate share of damages and penalties owed to employees, the Labor Commissioner’s Office may compare the contractor’s gross sales of each manufacturer’s garments, the employees’ hours worked on garments for each manufacturer, or the number of garment produced for each manufacturer. If there is insufficient testimony or records to determine proportionality on these bases, the Labor Commissioner’s Office will apportion the damages and penalties equally among the manufacturers.
- What records do contractors and manufacturers have to keep?
In addition to general recordkeeping requirements of an employer, contractors and manufacturers must keep for four years:
- The names and addresses of all garment workers directly employed.
- The hours worked daily by employees.
- The daily production sheets.
- The wage and rates paid each payroll period.
- The contract worksheets indicating the price per unit agreed to between the contractor and manufacturer.
- All contracts, invoices, purchase orders, work or job orders, and style or cut sheets. This documentation shall include:
- The business names, addresses, and contact information of the contracting parties.
- A copy of the garment license for every person engaged in garment manufacturing who is a party to the contract.
- The ages of minor employees.
- Any other conditions of employment.
All contracts between manufacturers and contractors should be in writing and include the manufacturer’s and contractor’s garment license (including expiration date), legal name, fictitious business name, and designated agents for service of process. It should also contain the contractor’s and manufacturer’s Workers’ Compensation carrier, policy number, and date of expiration for the contractor and manufacturer. Additionally, it should contain the business address, the telephone number, and the fax number of the contractor and manufacturer.
Each contract should clearly state:
- The date the contract was entered into.
- The date the contracted garments are due for completion,
- The unit price, number of garments, and description of the garments being made.
- The style numbers, cut or lot numbers.
- The total price of the contract.
- The date(s) the manufacturer shall pay the contractor.
- The parties should also keep any changes to the original contract.
Brand Guarantors must keep the following records for four years:
- Contract worksheets indicating the price per unit agreed to between the brand guarantor and the contractor or manufacturer.
- All contracts, invoices, purchase orders, work or job orders, and style or cut sheets. This documentation shall include the business names, addresses, and contract information of the contracting parties.
- A copy of the garment license of every person engaged in garment manufacturing who is required to register with the Labor Commissioner under Section 2675, and with whom the employer has entered into a contract for the performance of garment manufacturing.
Licensing and Registration
- Who has to register under the Garment Worker Protection Act?
- Do brand guarantors have to register?
- What is the impact of this new law on a garment registration?
Every person engaged in the business of garment manufacturing must register with the Labor Commissioner. Under the law, garment manufacturing is defined as: “sewing, cutting, making, processing, repairing, finishing, assembling, dyeing, altering a garment’s design, causing another person to alter a garment’s design, affixing a label to a garment, or otherwise preparing any garment or any article of wearing apparel or accessories designed or intended to be worn by any individual, including, but not limited to, clothing, hats, gloves, handbags, hosiery, ties, scarfs, and belts, for sale or resale by any person or any persons contracting to have those operations performed…” (See Labor Code § 2671(c).)
Brand guarantors must register if they are engaged in garment manufacturing within the meaning of Labor Code section 2671(c).
If it is determined a registrant failed to pay wages as described under the Garment Worker Protection Act, the Labor Commissioner may revoke, deny, or suspend the registration after the award has become final.
- When does the Garment Worker Protection Act take effect?
- How can an employee file a claim?
January 1, 2022. Before that time, manufacturers are liable for their proportionate share of minimum and overtime wages owed to employees along with liquidated damages and attorney’s fees under particular circumstances.