The Korean American garment and sewing sector is on high alert. This comes in the wake of the Los Angeles County District Attorney’s Office establishing a dedicated investigative unit to address “wage theft” and charging two Korean American businesses in its inaugural enforcement.
A significant portion of low-wage workers are employed by the Korean American businesses in the Downtown Fashion District. Stakeholders are attentively observing the District Attorney’s next moves. Some entrepreneurs are apprehensive that the already embattled industry, due to rigorous labor laws, will face even more challenges.
News spread rapidly within the Korean American garment community on September 7 when it was announced that the Labor Justice Unit (LJU) of the District Attorney’s office had charged two Korean American garment business owners.
Many were taken aback upon discovering that these business owners were accused of “grand theft” on account of unpaid wages.
Major garment firms, which often subcontract to sewing businesses, expressed anxiety that a single misstep could ignite repercussions for both them and their subcontracting partners.
“Under Californian labor legislation, prime contractors can also be held accountable if their subcontractors neglect to pay their employees or face legal actions,” disclosed an anonymous garment business owner. “Given that businesses violating labor laws have been pursued, prime contractors could be next in line.”
The Garment Worker Protection Act (SB 62) in California took into effect on January 2022. The law forbids payment systems based on piece-rate wages, wherein employees earn based on work volume. It mandates that employers provide an hourly rate matching or exceeding the minimum wage.
The Division of Labor Standards Enforcement has also intensified its demand for documents like employee pay slips and has instituted a shared liability provision for prime and subcontractors concerning labor law disputes.
The U.S. Department of Labor has encouraged California’s garment sector to bolster their adherence to labor rules. Recently, the Korean American Apparel Manufacturers Association (President Richard Cho) was approached by the Ministry of Labor for labor law guidance tailored for its members.
“As online retailing surges, garments produced in California but sold interstate could be scrutinized by the U.S. Department of Labor for labor law adherence,” commented an official from the association. “If labor law enforcement is ramped up and involves prosecutors, member companies will inevitably need to ensure their sewing partners are compliant or seek out more trustworthy suppliers.”
Chairman Young-ki Jang of the Korean American Apparel Manufacturers Association noted, “In the period encompassing the pandemic, the count of Korean American sewing enterprises in Los Angeles dwindled owing to the challenging commercial environment. Many have since relocated to Tijuana, Mexico. Although the core garment businesses remain unaffected, they should be vigilant about their subcontractors’ operations.”
The Korean American Garment Industry Association advises its members to maintain thorough records, like pay slips, during the recruitment process and to meticulously complete the registration forms for the California Division of Labor Standards Enforcement.
In response to California’s stringent labor regulations, numerous Korean American garment manufacturers are transitioning their operations to regions like Mexico, Texas, and China. They argue that the escalating labor expenses in the Fashion District, combined with the tightening labor laws and subsequent enforcement, are untenable. Some have even closed down their businesses, which have been in operation for decades.
BY HYOUNGJAE KIM [kim.ian@koreadaily.com]
