Combating Sweatshops in California
an interview with Alexjandra Domenzain of Sweatshop Watch
Jason Douthit | University of California, Davis, School of Law
Janine Esquivel | University of California, Davis, School of Law
Posted Thursday, May 13, 2004
4 U.C. Davis Bus. L.J. 15 (2004)

Born in Mexico and raised in Miami, Alejandra Domenzain studied International Relations at Georgetown University and worked at the National Council of La Raza in Washington, D.C. She then went on to pursue a double Master's Degree in Urban Planning and Latin American Studies from UCLA while also working at the UCLA Labor and Occupational Health and Safety Center on projects related to immigrant workers. Afterwards Ms. Domenzain worked as a Case Manager and Health Educator with the Garment Worker Center1. She has recently become the Associate Director of Sweatshop Watch2in Los Angeles.

Q: Many people believe sweatshops are merely a historical relic, but they are still prevalent, even in California. Why have they continued to exist?

A: To understand sweatshops it helps to look at the structure of the industry. Typically, large retailers don't produce their own clothing. They hire manufacturers to coordinate production. Those manufacturers, in turn, enter into financially insufficient contracts with small factories that demand quick-turn around. Retailers shield themselves by claiming that they are not aware of the conditions in which their clothes are produced, and refuse responsibility, even though they reap the profit of this "cheap production."

Q: In the past, what successful efforts have been made to combat the existence of sweatshops?

A: The 1920's witnessed the beginning of organization within the garment industry. Garment unions obtained a lot of power and made great inroads towards relieving sweatshop conditions. They were able to negotiate contracts for wages and benefits. When the union was strong, it was very effective. However, with sub-contracting and globalization, it has become difficult to organize workers in small factories along the traditional union model. Nonetheless, we've seen successful campaigns to educate consumers, to promote fair trade, and to support alternative models such as worker cooperatives.

Students, through groups such as United Students Against Sweatshops, have also taken the lead in ensuring that universities aren't selling collegiate apparel made in sweatshops. Government procurement policies can also ensure that our tax dollars are not used to buy sweatshop goods. Also, there are direct retailer accountability campaigns, both nationally and internationally. Retailers may pledge to monitor factories where their clothing is produced, and if that were to actually happen and happen consistently, it would make an impact. However, it is very hard to sustain comprehensive monitoring because of the spreading out of production. It is also a challenge to make sure that those monitors are independent and trustworthy.

Q: What is a typical day like for a sweatshop worker?

A: Usually they work longer than 8 hours, often 10-12 hours. We've heard of people working all through the night without sleep when there is a large order that has to be completed. Usually, people also work half-days on Saturdays, sometimes all day Saturday or Sunday as well. Typically workers have a half-hour lunch, but no additional breaks.

People tell us all the time that they are pressured to work very fast, to work long hours, and their bathroom breaks are limited. Sometimes they are discouraged from drinking water so they won't need to use the bathroom. The conditions are typically unsanitary with a lot of people crowded into small spaces with no ventilation. The temperature in the summer can be extreme. The cloth may have a lot of chemicals or dust and particles that cause many workers to experience severely irritated eyes, noses, and throats and long-term respiratory ailments. Also, because they sit or stand in the same position for so many hours at a time and engage in repetitive motions, there are many ergonomic ailments.

It is common to find dirty bathrooms, locked bathrooms, no toilet paper, no running water, no soap, no drinkable water, no sanitary place to eat, rats, cockroaches, and even insects. Also, most factories have a lot of hazards: unsafe machines without protections, chords dangling about, locked fire exits. Not only are there are a lot of wage and hour violations, but workers are plagued by many violations of health and safety laws. There was a recent study that found that 67% of Los Angeles garment factories violate minimum wage and overtime laws and that 75% violate health and safety laws. Personally, I think that these are low estimates. The statistics probably do not include unregistered factories-factories that are essentially part of the underground economy.

Q: Who is the typical California garment worker and what factors lead such individuals to take part in such an abusive industry?

A: The majority are immigrants. Some have work authorization, or residency, but most do not. The majority are women. About 75 percent are Latino, mostly from Mexico, but also from Central and South America. A large portion of Asian workers as well, including Chinese, Thai and Vietnamese workers.

Many newcomers go into the garment industry when they don't have the skills, language ability, work authorization, or knowledge of how to get into other industries. We have heard stories from workers that sometimes people "with papers" won't get hired because employers think undocumented workers will be easier to intimidate.

Many immigrants simply do not know their rights. And even if they do, they can not afford to stand up for them, because they are living day to day. If they were fired, the time that it would take to look for another job-and they would probably be looking for the same kind of low-paying, abusive garment job-is time that they can not afford to be without work. The fact that they are intimidated by employer threats of deportation, the fact that they don't know their rights, and lack of employment options all contribute to their tolerance of these conditions.

Q: Is there a chance to change the lifestyle sweatshop workers face when entering into such a work environment?

A: One level that we work on is empowering workers-to know what their rights are and to stand up for them. However, it is hard, because if you do stand up for your rights, you may get fired. Or if more people do it collectively, the shop is simply closed. (They are often small, little 15 - 20 worker shops that can be closed immediately.)

On a structural level, creating safe places for people to work will require more government oversight, as well as manufacturing and retailer accountability. A lot of manufacturers already have quality control inspectors that visit the factory as often as every week or every day, picking up and bringing work, sometimes even giving direct instructions to the workers. But even though they are directly involved in the production process, they are basically only there to see the quality of the clothing, not to see the quality of the work environment or whether the workers are being paid for all of the overtime.

Lastly, we need to look at solutions in terms of workforce development. Most of workforce and development training money doesn't benefit immigrant workers because they don't have the proper documentation or language skills. You can imagine, it is quite surreal for a worker from central Guatemala, who can barely even speak Spanish and can't read or write, to go to a one-stop center and be directed to a computer to look through job postings to mail her resume. Many advocates are working on ways to retrain workers by providing English language classes and native language job training, and to create career ladders that will allow them to have a living wage job, not merely a sweatshop job.

This is particularly pressing because the system of quotas in the Multi-Fiber Arrangement will be phased out by December 31, 2004. As a result, it is expected that production to be consolidated in a few countries-those countries with a combination of the lowest labor costs (wages), weakest labor standards and enforcement, and most-developed infrastructure for that industry, leading to massive economic and labor force dislocation. It's expected that Los Angeles will lose at least half of its apparel jobs and other countries will see their entire export economy devastated.

[AB633 was designed to hold California garment manufacturers responsible for sweatshop conditions by ensuring that they guarantee that the workers who sew their clothes are paid a minimum wage and overtime. ]

Q: How does AB633 work?

A: It authorized the Labor Commissioner to bring lawsuits on behalf of an entire workforce to enforce the wage guarantee and to revoke the registration of any garment manufacturer that fails to pay a wage award. AB633 also increased the registration fees for garment manufacturers and contractors in order to fund enforcement of AB633.

AB633 holds manufacturers accountable for making sure the factories they contract with are running a legal operation. This helps responsible business because without that accountability, a factory that wants to pay workers decent wages finds it hard to compete against sweatshops. We also have to be concerned about labor law enforcement in other countries, though, because U.S. based contractors are also competing against these factories. Ultimately, it is also a question of economic and workforce development, because the fact that there are poor, vulnerable populations ensures that workers feel they have no choice but to endure these conditions just to survive.

Q: Can you take us through a typical claim or complaint from inception to resolution?

A: A worker files a claim with the Division of Labor Standards Enforcement (DLSE), or Labor Commissioner's Office. In theory, within the next 10 days she receives a date for what is essentially a settlement conference. For each claim there is an investigator that is assigned to the case. The investigator interviews the worker, the employer, typically visiting the factory, and asks for the employer's records: time and payroll records, contracts, and such. Also, DLSE subpoenas records from the manufacturers, the people contracting work with the factories. Under AB633, manufacturers are called guarantors because they are supposed to guarantee minimum wage and overtime. If the employer does not pay the wages owed, then the manufacturer is responsible. The investigator gathers all of this information, from the worker, the employer, the manufacturers, and then presents it at the settlement conference. His report contains information on wages owed, penalties to be assessed, the employer's liability and the guarantors' proportionate share of liability-each guarantor is only liable for the amount of work that they had with the factory that the worker was working on. At the conference, the investigator presents his report and there is a chance for the parties to reach a settlement. If a settlement is not reached, then the claim proceeds to a formal hearing where the worker, employer and manufacturers each present their case to a hearing officer, who then assesses liability, wages owed, etc.

Q: What are some of the strengths and key components of AB633? What makes it work?

A: AB633 contains a successor liability clause. Often a garment contractor is listed under one name. However, they may change names or owners in an effort to avoid responsibility. Where a "new" shop is found with the same work force, working on the same labels, with the same contracts, and the same equipment then that business is considered a successor and becomes liable for past wages. So you can't just put the business in another name and erase its past.

One of AB633's most effective provisions is manufacturer joint liability. If a manufacturer contracts with an unregistered contractor, then they become essentially joint employers with joint liability.

AB633 is unique because of the expedited time frame: the 10 days to schedule the settlement conference which is supposed to take place within 60 days of filing the claim. Then, if necessary, the official hearing is supposed to be held within 30 days of the settlement conference. In theory, it is supposed to move along quickly. Actually, DLSE is very under-funded and under-staffed so in many offices this is not taking place within this timeline. Right now it may take over two months just for DLSE to schedule the settlement conference, and because of their full calendar workers have to waive their right to have a hearing within 30 days of the settlement conference. However, AB633 claims are still moving along more quickly than claims in other industries, which may take over a year to resolve.

Q: How could AB633 be made even more effective?

A: AB633 could be made more effective by improving the collection procedure. Once a claim is won, a worker has the option of assigning her case to the DLSE to collect by referring it to the Franchise Tax Board (FTB). However, from what we know, there is only one person at the FTB working on all collections cases for the entire State of California. We have yet to hear of anyone actually collecting any part of their award from this. So there is effectively no collection mechanism unless a worker can find an attorney who will take this on.

Fortunately, this doesn't mean that a worker will not be able to collect at all. A portion of the fees paid for contractor registration goes towards a state fund. If a worker wins her claim, but then cannot collect it, they may apply to the state fund to be reimbursed for his or her wages (but not penalties).

Also, the success of AB 633 depends a lot on DLSE's ability to conduct a thorough investigation. This is challenging. For example, say that a worker has worked on eight fashion labels. Sometimes you can't find who the label even belongs to. They are not registered, not listed. Or at the settlement conference both the contractor and the manufacturer deny having worked together. The worker is then put into the position of trying to prove this based on her recollection of having worked on that label. Manufacturers may try to lessen their liability by presenting limited invoices, claiming that they only worked with a particular factory for two months, though the worker remembers working on their clothing for years. Legally, the burden is on the employer to provide records indicating who his clients were, and in fact the regulations for AB633 specify that employers are supposed to list the names of the manufacturers on every pay stub. However, DLSE is not enforcing this regulation. Further, companies often deny being a manufacturer, claiming to be a retailer and therefore not liable under AB633. It is then difficult to prove who is the manufacturer.

However, overall, AB633 is a very strong law. It is ground-breaking and historic and certainly one of the strongest anti-sweatshop tools available. We have to find ways to strengthen its implementation so it can live up to its ideal.

Q: Has the enforcement of AB633 coincided with increased compliance with federal and state employment laws?

A: One problem is the ratio of investigators to garment shops is very low. For example, in Los Angeles there are approximately eleven inspectors dedicated to the garment industry and there are about 5,000 shops in the same area. So it is rare to be randomly inspected. In a time of budget crisis, the solution is more strategic efforts. DLSE's recently created Low Wage Industries Office and Task Force have used very effective methods to increase enforcement, but it really takes that kind of experienced, targeted effort by investigators given enough time and training to combat what's largely an underground economy. The stakes for this are very high, since delinquent garment shops cost the state millions of dollars in unreported payroll taxes, workers' compensation premiums, etc.

Q: What economic effect has AB633 had on the contractors and manufacturers? Can they afford to pay workers' claims over the long run?

A: Contractors are in a difficult position because retailers and manufacturers set the terms. The contractors are victims of the same system that the workers are. If a factory that wants to pay minimum wage and overtime, to run a clean shop, it can't afford to stay in business. The factory down the street that is willing to skimp on wages, and overwork their employees is going to be able fulfill contracts for less money and have a faster turn around time. So it is hard to be a responsible contractor, and to stay in business. This is why it is stressed that manufacturers and retailers take responsibility by engaging in financially sufficient contracts that allow contractors to pay the workers minimum wage and overtime. AB633 addresses this by holding manufacturers accountable for whom they do business with. When manufacturers contract with shops that are unregistered, they become joint employers.

Q: Can the retailers afford the increased labor costs?

A: Yes, absolutely. The actual labor cost of a garment is usually less than 5% of the total retail price. For example, Forever 21, a young woman's retailer, with about 95 percent of its production taking place locally, retails a shirt for $13 that has a total labor cost of 64 cents. The profit margin is so large for retailers, that all they need to do is pass some of it down so that workers at the bottom of the pyramid can earn minimum wage.

Q: Would consumers bear the brunt of the increased labor costs?

A: A common argument is that you can't get rid of sweatshops because consumers aren't willing to pay the extra labor cost. However, our argument is that you don't have to change the price of the garment because most of the profit stays with the retailer. If the retailer changed its practices and accepted a minimal decrease in profit, then the worker would have legal working conditions and consumers would not have to absorb the effects. To give you one example, in 2002, Levi's CEO made $24.9 million, or $11,971 per hour. Garment workers earn an average of $3 per hour. It's hard to argue that they can't afford to have their clothing produced by workers earning minimum wage.

Q: What would you like our readers to know about AB 633?

A: AB 633 represents all the challenges and opportunities of the modern economy. On the one hand, it shows how we can address the strategy of corporations to sub-contract in order to avoid responsibility for working conditions-which is happening in many industries. On the other hand, the challenges in implementing AB 633 remind us that we need to build a strong political will to fund labor law enforcement and to pass corporate accountability laws. There is more and more public outrage about the injustice of systems where multi-nationals profit richly from workers facing unstable, low wage, unhealthy, abusive working conditions. There are also more vehicles than ever to take action and a growing anti-sweatshop community globally. I would encourage readers to find out small and big steps they can take to stay informed and stay active. The only way for these conditions to end is for us to refuse to tolerate them-and we have the political and economic voice to do that.

1 The Garment Worker Center was initially a space for garment workers to come and simply discuss problems at work and possible solutions. It developed into a place where workers engage in worker education, training, and leadership development, as well as organize to improve working conditions. The Center is also organizing campaigns. Currently it is leading a national boycott against retailer Forever 21 and a related public education campaign and works with other community groups on legalization for immigrants.

GWC also provides case management and represents workers in wage claims under AB633. While working at GWC the past year and a half, I represented workers in wage claims under AB633.

2 Sweatshop Watch was founded in 1985. It is a coalition of over 30 labor, civil rights, community, immigrant rights, religious, women, and student organizations, as well as many individuals with the goal of eliminating exploitation in sweatshops. We have a focus in California, but are also involved in other campaigns nationally and globally.