In September 2021, California’s Governor signed Senate Bill (SB) 62 which expands the definition of the garment manufacturing industry for purposes of wage claim enforcement to include brand guarantors. A brand guarantor is a person who contracts for the performance of garment manufacturing. Brand guarantors include persons who license a brand or name for garment manufacturing.
SB 62 also prohibits any employee engaged in the performance of garment manufacturing to be paid by the piece or unit, or by piece rate, except for workplaces covered by a collective bargaining agreement. The collective bargaining agreement must expressly include: (1) employees’ wages, hours of work, and working conditions; (2) premium wage rates for all overtime hours worked and a regular hourly rate for those employees of not less than 30 percent more than the state minimum wage; and (3) stewards or monitors, and a process to resolve disputes concerning nonpayment of wages. Employers may still offer incentive-based bonuses to employees.
SB 62 went into effect on January 1, 2022. California’s Labor Commissioner, who is charged with enforcement of the law, has published FAQs regarding SB 62.
The FAQs provide some of the following clarity to the application of SB 62.
Definition of Garment Manufacturing Operations
Per Labor Code Section 2671(c), garment manufacturing operations refer to the preparation of any garment or any article of apparel or accessories designed or intended to be worn by another person, and includes sewing, cutting, making, processing, repairing, finishing, assembling, dyeing, altering a garment’s design, causing another person to alter a garment’s design, or affixing a label on a garment. Garments include but are not limited to clothing, hats, gloves, handbags, hosiery, ties, scarfs, or belts.
Piece Rate in Garment Manufacturing
As stated in the law, garment manufacturing employees must be paid an hourly rate not less than the minimum wage and cannot be paid a piece rate. However, employers may offer incentive-based bonuses.
Licensing and Registration Requirement
Every person who engages in the business of garment manufacturing must register with the Labor Commissioner. Brand guarantors must also register if they engage in garment manufacturing per the definition above.
In addition to general recordkeeping requirements of an employer, contractors and manufacturers must keep for four years:
- The names and addresses of all garment workers directly employed.
- The hours worked daily by employees.
- The daily production sheets.
- The wage and rates paid each payroll period.
- The contract worksheets indicating the price per unit agreed to between the contractor and manufacturer.
- All contracts, invoices, purchase orders, work or job orders, and style or cut sheets. This documentation shall include:
- The business names, addresses, and contact information of the contracting parties.
- A copy of the garment license for every person engaged in garment manufacturing who is a party to the contract.
- The ages of minor employees.
- Any other conditions of employment.
Brand Guarantors must keep the following records for four years:
- Contract worksheets indicating the price per unit agreed to between the brand guarantor and the contractor or manufacturer.
- All contracts, invoices, purchase orders, work or job orders, and style or cut sheets. This documentation shall include the business names, addresses, and contact information of the contracting parties.
- A copy of the garment license of every person engaged in garment manufacturing who is required to register with the Labor Commissioner under Section 2675, and with whom the employer has entered into a contract for the performance of garment manufacturing.
If you have questions regarding compliance with SB 62 or related issues, contact a Jackson Lewis attorney to discuss.