Industry News
California to Require Garment Industry to Pay Hourly Wages to Workers
California Governor Gavin Newsom signed a bill that will ensure thousands of workers in the garment industry are paid a minimum wage by the hour instead of a piece-rate compensation.
Newsom signed Senate Bill 62 on September 27, also called the Garment Worker Protection Act, that will pave way for garment workers in the state to get a minimum wage of $14 per hour for employers with 26 or more employees."California is holding corporations accountable and recognizing the dignity and humanity of our workers, who have helped build the fifth-largest economy in the world," Newsom said in a statement.
"These measures protect marginalized low-wage workers, many of whom are women of color and immigrants, ensuring they are paid what they are due and improving workplace conditions. We are committed to having their backs as we work to build a stronger, more inclusive economy," he added.
Critics of the piece-rate system say it creates an unsafe work environment as workers must produce at faster speeds to make more money, which could still result in less than minimum wage.
Another component of the new law makes fashion companies liable for any unpaid wages at their factories even though most brands rely on subcontracting and have several layers between themselves and the employers overseeing factory workers. Many in the fashion industry opposed the bill before it became law, saying it was hurtful for fashion businesses and the state as manufacturers would rather move out of California than pay back wages for subcontractors.
In July, Nate Herman, American Apparel and Footwear Association senior vice president of policy, noted that the legislation would drive apparel-making businesses out of California. “Although well-intentioned, the bill, as currently written, would impose unprecedented joint liability on businesses with no control over garment workers. If this provision becomes law, it would drive garment manufacturing out of California and lead to the loss of jobs in California’s garment manufacturing sector. This is because companies doing the right thing, paying prices that ensure decent wages for workers, will be held liable for companies that intentionally try to do the wrong thing,” Herman said at the time.
Los Angeles has the highest concentration of garment industry workers in the United States with some 2,000 manufacturers employing more than 40,000 workers, according to workers rights organization the Garment Worker Center. Many small factories often operate without proper registration or enforcement which contributes to exploitation in the industry, it said.
About 85% of garment workers do not earn the minimum wage and are instead paid a piece rate of between 2-6 cents per piece. Most garment workers work 60-70 hour weeks with take-home pay of about $300, according to the work rights group. The organization welcomed the signing of the bill by Newsom.
A similar bill went through the California state legislature during the last legislative session but ran out of time in September 2020, when the deadline to vote on new bills had passed.
SB 62 will go into effect on January 1, 2022.
