An investigation by the Department of Labour in California has found contractors making garments for brands such as Nordstrom being paid only $1.58 per hour.
The retail industry is currently facing enormous pressure as national chains close stores across the country. Unfortunately, one of their biggest challenges is keeping costs down, which may have led to unethical contracts.
This week the Department of Labor released a report that had some shocking information.
Federal investigators examined 50 contractors and manufacturers in Southern California, considered the epicenter ofthe domestic garment industry, and were surprised to find that 80% were breaking one or more provisions of US labor law.
Excerpts from the report state:
"More than 50 percent of the time, the division found employers illegally paying workers part or all their wages off the books, with payroll records either deliberately forged or not provided."
"The fiscal year 2022 survey also found 32 percent of contractors paying garment workers piece-rate wages, a practice prohibited by the State of California on Jan. 1, 2022....In a particularly egregious case, division investigators learned a contractor paid garment workers as little as $1.58 per hour."
The contractors and manufacturers included in the survey produce garments for sale by big-name national retailers, including Bombshell Sportswear, Dillard’s, Lulus, Neiman Marcus, Nordstrom, Socialite, Stitch Fix, and Von Maur.
From 2017 and 2022, the Department of Labor collected $9.2 million from companies in Southern California in back wages and penalties.
"Despite our efforts to hold Southern California’s garment industry employers accountable, we continue to see people who make clothes sold by some of the nation’s leading retailers working in sweatshops. Many people shopping for clothes in stores and online are likely unaware that the ‘Made in the USA’ merchandise they’re buying was, in fact, made by people earning far less than the U.S. law requires.” Wage and Hour Regional Administrator Ruben Rosalez
For the latest list of retail store closures in California, you can check this article. You can also follow me to keep up to date with all the latest business developments.
Are you surprised to hear of sweatshops operating in Southern California? What would you like the government to do to prevent this from happening? Do customers expect cheap clothes that result in low wages for garment makers?
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