California Ends ‘Piece Rate’ Work For Garment Workers, Guaranteeing Minimum Hourly Wage

California Gov. Gavin Newsom (D) signed a bill Monday that will require the state’s garment factories to pay workers a minimum hourly wage.

The law, known as Senate Bill 62, bans the industry’s long-standing practice of “piece rate” payment, in which workers are paid according to how many units of work they complete in a certain amount of time.

Critics say the piece rate system forces workers to toil at unsafe speeds, and that it results in many workers getting paid less than the minimum wage. Under the new law, employers can only use a piece rate system when determining bonuses.

The law also goes a step further by putting fashion brands on the hook for wage theft violations at the California factories that produce their clothes. Brands typically rely on a subcontracting system, putting several layers of corporations between themselves and the employers overseeing workers on the factory floor.

The bill was sponsored by state Sen. María Elena Durazo (D), a former vice president of the labor union Unite Here. Durazo said in a statement that the legislation will “level the playing field for ethical manufacturers that are doing the right thing.”

“For too long, bad-actor manufacturers have exploited garment workers toiling in unsanitary conditions for as little as $5 an hour,” Durazo said. 

Most clothes worn by Americans are now made overseas, but of those still made in the U.S., many come out of Los Angeles factories. More than 45,000 workers, most of them Latino and Asian immigrants, produce clothes in the city’s garment industry, according to the Garment Worker Center, an advocacy group that supported S.B. 62. Many end up being paid off the books.

The job tends to involve long hours, low pay and plenty of occupational hazards. A 2016 study by the University of California, Los Angeles Labor Center, based on surveys with workers, found that factories were rife with dust, poor ventilation and blocked exits. The study pegged the average wage at $5.15 per hour at the time, saying “these severely sub-minimum wages are a direct result of piece rate system abuses.”

The U.S. Department of Labor often cites L.A. garment factories for wage-and-hour violations, finding cases of workers not being paid the minimum wage or not receiving overtime pay. The New York Times reported in 2019 that “fast fashion” brand Fashion Nova had its clothes produced in facilities that owed nearly $4 million in back wages over the course of three years.

For too long, bad-actor manufacturers have exploited garment workers toiling in unsanitary conditions for as little as $5 an hour.
California state Sen. María Elena Durazo (D)

Business groups opposed S.B. 62, but not because it abolishes the piece rate pay system. Rather, they didn’t like the way the law would hold brands more accountable for wage theft in subcontracted facilities by tightening a related law passed in 1999, the Los Angeles Times reported.

The California Chamber of Commerce had urged Newsom to veto the bill, arguing that garment makers would take their business out of state rather than risk having to pay back wages for subcontractors. “It’ll be a lot easier for a retailer or brand to find a manufacturer located elsewhere, say, Arizona or Bangladesh, who won’t present these liability issues,” a blog post on the group’s website read.

S.B. 62 wasn’t the only notable labor-backed bill to make into law on Monday. Newsom also signed Senate Bill 639, which will end the use of “sheltered workshops” that allow a sub-minimum wage for workers with disabilities. 

Sheltered workshops are controversial but common in the U.S. Supporters argue that they provide opportunities to workers who might not otherwise have them. However, groups such as the National Down Syndrome Society have called for them to be phased out, saying they exploit vulnerable workers with reduced wages.

California joins at least 10 other states on a path to eliminating sub-minimum wages in sheltered workshops. Under the new law, such facilities will have to pay workers at least the California minimum wage by 2025.

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