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The Garment Worker Protection Act (Senate Bill 62) is a landmark California law passed by Governor Gavin Newsom in September 2021 and that went into effect in January of 2022. The legislation took years of grassroots campaigning and addresses the root causes of systemic wage theft in apparel manufacturing by eliminating the piece rate system of pay and introducing new liability on fashion brands to incentivize them to stamp out workplace violations.
The Garment Worker Protection Act aims to end wage theft and enforce better working conditions in California apparel manufacturing. Prior to SB62’s passage in 2022, the average garment worker wage in Los Angeles was $5.85 an hour and as little as $2.68, all while garment workers were sewing clothes for profitable brands like Forever 21, Ross Dress for Less, Urban Outfitters, and Fashion Nova. By closing loopholes in the law that allow brands and manufacturers to underpay workers without accountability, the new law will nearly triple garment workers’ hourly wages and also give them a path to justice when they experience wage theft.
Joint liability means that brands and retailers share in the responsibility alongside their manufacturers to stop workplace violations and ensure legal wages. Many major fashion brands consistently underpay factories in California, undermining the factory’s ability to meet a minimum wage, and research shows that the low prices paid by many brands is a root cause of poverty pay in garment factories globally. The U.S. Department of Labor has found that “the heart of the [wage theft] problem lies squarely with the pricing structure dictated by the retailers in this industry.” Joint liability on brands and retailers shifts the business model in fashion by incentivizing retailers to act as allies in tackling these workplace violations. It also levels the playing field for brands and manufacturers who are already paying fairly and that operate responsible supply chains.
SB62 is a landmark step towards ending systemic worker exploitation in fashion both by eliminating by-the-piece payment that’s used to underpay workers and by incentivizing brands through legal liability to tackle workplace violations. The Garment Worker Protection Act marks the first time anywhere in the world that brands and retailers are jointly and severally liable for wage theft in garment factories and subcontractors. This is the first step we’ve really seen in a piece of legislation that shifts the business model in fashion. The bill puts the onus on brands and retailers to ensure they are paying their suppliers enough to meet the minimum wage.
As of January 1, 2022, all California garment factories are now required to pay the minimum wage instead of the piece rate (factories can pay piece rate as an incentive bonus on top of the minimum wage). Any worker can now file a wage theft claim if they continue to be underpaid, and the brand and retailer can be jointly liable if they produced in a factory that underpaid its workers. It’s important to note that laws take time to implement and changes won’t happen overnight. Much of the early months of 2022 were spent laying the groundwork of implementing the new legislation, including educating factories, brands and garment workers about the change in law and the new rules about wages and brand liability.
As of January 2023, the Garment Worker Protection Act has been in effect for one year. According to the Garment Worker Center, the worker rights nonprofit that led the fight to pass the bill, some members are now getting paid minimum wage, three times higher than many workers were getting paid beforehand, yet others are still facing wage theft. While the expectation is that SB62 will have a positive impact on working conditions over time, it’s still too early to pinpoint how the bill is impacting California’s manufacturing landscape and workforce, and more studies and implementation needs to be done.
According to the Garment Worker Center, the Garment Worker Protection Act will help protect the integrity of the “Made in USA” and “Made in LA” brands by ensuring products made in the United States are, in fact, ethically made. What’s more, businesses can now produce in the United States without fear of reputation damage, and responsible businesses can operate without being undercut by unscrupulous competitors.
No. Labor is a very small percentage of the retail cost of a garment, typically as small as 2% of the retail price. The cost of labor can rise substantially without having a substantial impact on the price to consumers. For example, on average, factories in California receive 73% of what they should from brands and retailers to meet the minimum wage. So, if a brand and retailer pays a factory $2 for a garment; they’d now pay $3.46 to help the factory comply with the minimum wage. Companies can choose different ways of absorbing increased costs. Some pass them on to consumers and others accept a lower rate of profit or change the type of product they produce.
According to one media report, SB62 has caused businesses to leave Los Angeles’s apparel manufacturing hub since going into effect. What’s more, organized opposition to the bill often called it a “job killer.” The data simply doesn’t support this harmful narrative. Across California, apparel employment is on the rise since the Garment Worker Protection Act went into effect in early 2022 according to preliminary BLS data. There are also major companies moving more production to California, including Madewell, Target, Everlane, and Polo Ralph Lauren denim supplier Saitex and Classic Fashion, which produces apparel for giants like Walmart, Adidas, American Eagle, and Target. Apparel employment was also up in the US in 2022 over 2021, according to BLS data.
What about in LA’s historic downtown garment district? The data shows that apparel manufacturing jobs are rebounding slightly since the middle of the pandemic and that the decrease in jobs that has plagued LA’s industry for decades has actually slowed in the past few years. That said, LA’s downtown is undergoing massive changes due to gentrification, rising rents, proposed city zoning changes, and the devastation of the pandemic. While it does appear some work appears to be moving out of downtown area, the good news is that garment work appears to be moving out to other areas of Los Angeles County, where rents are cheaper.
Despite arguments to the contrary, a large body of research shows that raising worker pay in low wage industries does not have a large impact on employment, including for low-wage workers. The Garment Worker Protection Act only raises costs or changes compliance for companies that were underpaying workers before the bill’s passage or contracting with factories that were underpaying their workers. It could be that some companies with a business that was built around subminimum wages make the decision to shutter or leave rather than change their business model, but that is hardly the fault of workers demanding to be paid the legal minimum.
The reality is that this is a period of historic upheaval, and the fashion industry has been forever changed by the Covid-19 pandemic, with some companies closing and never reopening and others making big changes to where they source products because of supply chain disruptions, inflation and geopolitical conflict. Any media coverage that attempts to single out SB62 as a factor in these wider historic economic shifts is misleading readers.
Prior to the Garment Worker Protection Act’s passage, Fashion Nova, Windsor, Forever 21, Harley Davidson, Lulu’s, Urban Outfitters, and Charlotte Russe were among the top wage theft violators in California according to a report from the Garment Worker Center. They leveraged their high volume purchases to demand lower prices from manufacturers and subcontractors in Los Angeles.
Yes, but that could soon change. The bill protects only California garment makers, but this is significant, as the state is home to the United States’ largest garment manufacturing hub, employing 46,200 garment workers. Cut-and-sew garment manufacturing is the second largest manufacturing sector and second largest creative economy in Los Angeles. What’s more, because California laws shape laws nationally and even globally, the Garment Worker Protection Act has already inspired a federal bill (the FABRIC Act) and aspects of a state bill, the New York Fashion Act, which includes joint and several liability on brands for wage and hour violations.
Yes! The bill has already had a seismic impact on the policy landscape. The Garment Worker Protection Act has inspired a federal bill, called the Fashioning Accountability and Building Real Institutional Change Act (FABRIC Act), which was introduced in Congress by Kirsten Gillibrand (D-NY) in May of 2022. It includes the key elements of SB62, including joint and several liability on brands for wage theft and the end of the piece rate until the minimum wage is met, alongside major investments in domestic apparel manufacturing. What’s more, joint and several liability for wage theft is also in the latest version of the New York Fashion Act moving through the New York State legislature in 2023.
More than 160 brands, retailers, manufacturers and other companies supported the Garment Worker Protection Act, including Saitex, Reformation, We Are HAH, All for Ramon, Mara Hoffman, Eileen Fisher, and many others more. A full list of endorsers can be found here.