Is SB62 Garment Act a ‘Job Killer?’ Fashion Squares Off with California Chamber of Commerce

Updated: Aug 18, 2021

By Sourcing Journal

This article was published in Sourcing Journal August 3, 2021. We are sharing because it explains the viewpoints of those both in support of and opposed to the legislation. It also highlights some recent controversy within the apparel industry in relation to the bill.


SPESA will continue to monitor this legislation and provide updates through our monthly Trade & Policy Round-up.


Brands, producers and social advocacy groups across the Golden State are banding together to push back against the California Chamber of Commerce (CCC) for deriding the Garment Worker Protection Act as a “job killer.”


The business network included SB62 on its annual list of proposed legislation earlier this year, saying that it believes the bill stands to negatively impact California employers by increasing their liability for wage violations across the supply chain. The bill’s requirements “will encourage companies to contract with manufacturers outside of California,” it wrote, thereby limiting the demand for the state’s garment manufacturers.


Members of California’s fashion community are taking aim at the chamber’s claims. Last week, apparel players led by supply chain ethics non-profit Remake penned an open letter officially requesting that SB62 be dropped from the group’s job killer list. The signatories included dozens of brands and producers like Boyish Jeans, Christy Dawn, Cotopaxi, Eileen Fisher, Lacausa, Mara Hoffman, Reformation, Saitex, Triarchy and Unspun, as well as the ACLU, Black Caucus, API Caucus, Cal Labor Fed, Latino Caucus, County of Los Angeles, Public Law Center and the Sierra Club of California.


“You do not speak for California’s small businesses when you lobby to oppose this bill,” the collective wrote, adding that designating the legislation as bad for business undermines the hardships the state’s workforce has faced during the pandemic. “Garment makers in LA lost their lives during Covid-19 precisely because endemic wage theft robbed them of the savings and safety net necessary to stay home from work.”


Eliminating the pervasive threat of wage theft is necessary in order for the state’s garment sector to flourish into the 21st century, and “the sustainable business community wants a level playing field, enabled by strong labor laws,” it added.


“SB62 eliminates the exploitative piece-rate wage system, that no worker should have to endure to make a living, and increases labor enforcement to ensure compliance,” Reformation sustainability director Carrie Frieman said.


California brands have long benefited from the ability to bargain for low pricing with their suppliers without assuming responsibility for how cost-cutting impacts workers’ livelihoods, the signatories wrote. In fact, brands routinely price orders “so low that factory owners are encouraged to skirt labor law in order to get or maintain contracts,” they continued, citing an investigation by the U.S. Department of Labor revealed that brands pay an average 73 percent less than the fees required to meet minimum wage.


Until fashion brands are held jointly liable for the actions of their suppliers, the “harmful gap in accountability” will continue to facilitate sweatshop conditions in California, the letter said.


The CCC responded to the open letter in kind, with policy advocate Ashley Hoffman writing that it shares the collective’s goal of eliminating garment industry wage theft. “It is inexcusable that there are garment manufacturers operating illegally that fail to pay minimum wage, fail to abide by health and safety standards, or fail to register with the state as required by the Labor Code,” she wrote. These illegal acts harm workers and undermine legitimate operations that do follow the law, she added.


“If SB 62 were amended so that it only eliminated the use of piece-rate work in the garment industry, we would remove our opposition,” Hoffman wrote.


The CCC takes issue with the concept of expanding joint liability across supply-chain actors including brands and retailers to manufacturers and subcontractors. SB62 includes the legal presumption that any “brand guarantor” is liable for lost wages, she wrote, eliminating proportionality of fault for illicit behavior.


“If a worker sews one garment one time that is affiliated with a licensor, that licensor is presumed to be indefinitely on the hook for all of that workers’ wages and any resulting damages, penalties, or attorney’s fees,” she noted by way of example. “It expands liability to cover not only wages and overtime, but also business expenses, penalties, liquidated damages, attorneys’ fees, and penalties for workers’ compensation coverage.” This degree of joint liability would far exceed other industries like construction or property services, she said.


Brands are already deemed liable under Labor Code section 2810 for the impacts of setting payment terms too low to meet minimum wage, she added, and while the piece-rate payment model is legal, paying workers below minimum wage is not. Rather than expanding legislation to impact brands and retailers, CCC believes that the existing laws should be enforced to punish bad actors and avoid scaring off well-meaning brands from producing in California.


“SB 62’s expansion of joint liability and the effects it would have on a company’s evaluation of whether it will have any involvement in garment manufacturing in California cannot be understated,” Hoffman wrote, adding that about half of the letter’s signatories “appear to manufacture outside of California.”


“We do not disagree that there is wage theft in the garment industry. We do not disagree that companies need to follow minimum wage laws,” Hoffman added. “This is precisely why enhanced enforcement of the laws that already exist to address these exact problems is necessary.”


SB62 continues its journey through the state legislature, having passed through the California Assembly’s Judiciary Committee on June 22. “Today’s vote means California is one step closer to respecting the dignity of our garment-industry workforce, which has been exploited for far too long,” sponsor and California State Senator María Elena Durazo (D-Los Angeles) said at the time. The bill is expected make its way to the Assembly Appropriations Committee in the coming weeks.


Remake and L.A.’s Garment Worker Center have been dialing up efforts to raise awareness of the bill’s benefits to the state’s apparel workforce—and hitting back at detractors. Last month, during a discussion with California brands and producers, Remake said American Apparel and Footwear Association’s opposition to the bill did not reflect the attitudes of its 1,000-brand membership. “The idea that even big business is in opposition to the bill is overstated—and quite frankly, might be fabricated,” Remake advocacy and policy director and PayUp Fashion Coalition coordinator Elizabeth Cline said at the time.


Last week, the organizations mobilized a rally at Governor Gavin Newsom’s L.A. office, and on Aug. 12 they will host a joint postcard writing event asking him to push the policy forward.

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