After a federal court upheld its subpoena against LA-based clothing chain Forever 21, the U.S. Department of Labor's Wage and Hour Division confirmed that the agency is cracking down on what it considers widespread violations of the Fair Labor Standards Act in Southern California's apparel industry. The federal agency claims that garment makers and retailers violate the FLSA's recordkeeping, minimum wage and overtime requirements on an almost habitual basis. In fact, the DOL found violations in 93 percent of the apparel companies it has investigated.
"Garment workers historically have been subjected to exploitation and paid substandard wages," the U.S. Solicitor of Labor said in a statement. "The order underscores that everyone in the supply chain has a responsibility to ensure that workers receive the federal minimum wage and earned overtime, and it demonstrates our commitment to enforcing those protections despite tactics designed to obscure the employment relationship."
Over the past five years, the Wage and Hour Division has conducted as many as 1,500 investigations of apparel companies in Southern California alone. All the FLSA requires of these employers is that they pay their hourly employees no less than $7.25 per hour -- the federal minimum wage -- and that the pay overtime at time-and-a-half when more than 40 hours are worked in a week. Beyond that, the law only requires accurate records to be kept of employee time cards, overtime hours, pay and related information.
When companies violate the FLSA, however, they are prohibited from putting their goods on the market. Products produced by violating minimum wage and overtime or child labor laws are considered "hot goods."
Last August, the agency began a massive sweep of apparel shops in Los Angeles, seeking any shops producing garments for sale who were violating the FLSA. At least one of the shops found to have violated minimum wage and overtime laws had been selling its garments to Forever 21.
Finding this, the DOL sent a subpoena to Forever 21, seeking its own records. Forever 21 refused to comply with that subpoena, but a federal judge has just ordered the company to do so.
The agency has not said whether Forever 21 is itself suspected of wage and hour violations, or if the subpoenaed records only relate to the company's receipt of "hot goods." In either case, LA's garment industry has long been a hotbed of injustice toward workers and would be wise to put its operations into compliance with federal law.
Source: U.S. Department of Labor, Wage and Hour Division, press release, "Federal court orders Forever 21 to surrender supply chain information subpoenaed by US Department of Labor," March 14, 2013