New York State Website

 
 

Apparel Industry Task Force

 

How to identify garment sweatshops:  A business guide for manufacturers and retailers

 

          The New York State Department of Labor offers this business guide to help manufacturers and retailers identify and avoid sweatshops when seeking apparel contractors.

          Sweatshops operate illegally as part of the underground economy. They typically are fly-by-night operations that can pack and move quickly from one place to another, sometimes across state lines. Sweatshops flourish because of the huge competitive advantage they hold over legitimate businesses that pay fair wages, provide safe working conditions, pay taxes and contribute to the economic and social health of New York and the nation.

          Although sweatshops routinely can produce garments at lower cost than honest shops, a company that enters into a contract with a sweatshop faces the possibility of civil penalties, criminal fines and the loss of goods that are illegally produced. Doing business with a sweatshop also means a company encounters the risk of having its public reputation damaged.

          We in the New York State Department of Labor recognize and applaud the important contributions of the garment industry. We hope that you find this guide useful. Please contact our Apparel Industry Task Force in New York City if you have questions, want more information or need assistance.

Apparel Industry Task Force
New York State Department of Labor
Division of Labor Standards
 District Offices
 

Legal requirements

          Basic legal requirements that govern the production of clothing follow.

"Hot Goods" law: New York State enacted 1996 legislation that prohibits the sale or distribution of clothing produced in sweatshops. In addition, authorities can stop the sale and/or distribution of apparel produced in any shop that cheats workers of their wages or pays less than the minimum wage. Garments produced without proper payment of wages may be tagged as "unlawfully manufactured" by Task Force investigators.

Wage payments: A manual worker must be paid weekly, and not later than seven calendar days after the end of the week in which the wages are earned. With each wage payment, an employee must be given a written statement showing wages earned, deductions, hours worked and the pay rate. If the labor performed is piecework, the wage statement must show the number of pieces completed and hours worked. If the time needed to complete work at a piece rate drops the wages below the hourly minimum, the contractor must pay the minimum wage.

Wage deductions: An example of an illegal deduction is the common practice of sweatshops taking a percentage of an employee's wages when payments are made in cash. Employers are not allowed to make wage deductions except those authorized under state and federal law (examples: federal and state income tax, social security). Additional deductions may be made when an employee grants permission in writing for specific purposes (examples: insurance premiums, pension or health benefits, charitable contributions, United States savings bonds).

Overtime: After working 40 hours, employees must be paid overtime at one and one-half times their hourly pay rate. Pieceworkers must be paid one and one-half times their average rate after working 40 hours.

Child labor: Children under the age of 16 cannot work in factories. Working papers must be kept on the shop premises. Hours of work must be posted for all minors under 18 years of age.

Safety: Factories must comply with state and federal occupational safety and health laws and fire codes. Fire exits must be unlocked and accessible during working hours.

Registration: All manufacturers and contractors that produce apparel must be registered with the New York State Department of Labor. A registration certificate must be posted where employees can see it.

Industrial homework: Nothing may be taken out of the factory to be worked on in the home. No work may be distributed directly to home workers.

Why we register garment companies

          Garment industry manufacturers and contractors are required to register with the New York State Department of Labor. In addition, when a retailer works directly with a contractor to produce garments, the retailer is considered a manufacturer and must register.

          Our garment industry Registration Database is posted on this Internet website so that garment businesses can find out immediately whether their current and potential contractors are registered. The database contains the name and main address (branch locations are not included) of the contractor/manufacturer. You can search our Apparel Database or telephone the Apparel Industry Task Force and get the same information.

          A garment contractor that fails to register is breaking state law and is a sweatshop operation. Because a garment company that does business with sweatshops is subject to possible fines and prosecution, we recommend you tell contractors that you expect them to comply with state and federal regulations as part of their contract with you.

          We also recommend that you ask a contractor whether your order will be subcontracted out. If such is the case, there is a chance that sweatshop labor might be used at some point in production, so we advise that you find out who the subcontractors are.

Task force Investigations

          Task force members investigate garment sweatshops, where they inspect working conditions, review employee records and examine registration certificates. To meet registration requirements, contractors must provide workers' compensation insurance as well as comply with other state laws that govern the production of apparel and accessories to apparel.

          The task force issues violation notices to businesses that break state laws covering registration, child labor, wages and benefits, working hours and industrial homework. Task force investigators also may seize materials distributed to "homeworkers."

          In addition, when task force investigators find sweatshop conditions that seem to violate state or federal safety and health laws, or local building and fire codes, the task force will alert the appropriate regulatory agency.

Sweatshop characteristics

          No single characteristic marks a garment factory as a sweatshop. However, there are many characteristics common to sweatshops. Examples follow.

Fire hazards: Perhaps there might be only one exit. Fire exits might be blocked or locked. Fire extinguishers are not mounted on the walls or are missing from the mounting. There are no fire exit signs. Electrical exit signs are not lighted.

Electrical hazards: Wires are exposed. Protective covers are missing. Many extension cords are in use. Wires are frayed, unconnected or dangling.

Safety hazards: Machines and fans lack safety guards. Belts and pulleys are exposed. Steam pipes are not insulated. Aisles are less than 36 inches wide. Trash, clothing or other obstacles block aisles and doors. Stairs do not have handrails.

Health hazards: Ventilation is poor (heavy dust deposits may mean inadequate ventilation). If employees have hand rashes, the shop might be using toxic dyes. Restrooms are dirty. Lighting is poor.

Structural dangers: Elevators work with doors open. There are holes in the factory's floors or ceilings. There is excessive play in floors. A basement shop does not have a certificate of occupancy posted.

Wage violations: Employees are not paid on time. Workers do not receive wage statements with their pay. There are no overtime rates for piecework. Paydays are missed or there is no regular payday. There are more employees than timecards. The time clock is broken or not used. Payments for weekend or overtime work are made separately in cash. Hours on the job are not recorded for pieceworkers.

Child labor: Hours are not posted for children under 18. Children under 16 are working in the shop. A young employee responds with contradictory dates of birth when questioned about age. Children are seen outside the factory. A large increase in piecework production indicates that children may be helping their parents.

Industrial homework: The shop's production seems to be greater than its capacity. Employees are seen carrying large packages or bags into and out of the factory. Daily production rates vary. Parts of clothing (examples: cuffs, collars) might be missing. Inventory is missing.

Registration violations: A State Labor Department registration certificate is not displayed. The wrong employer's name is on the certificate.

Tax irregularities: A company's identity changes frequently without a change in officers. The shop does not use a journal or daybook. The company has no bank account. The shop uses an individual who cashes checks instead of a bank. Deliveries to the shop have different names in the address.

Our educational seminars

          The New York State Department of Labor's Apparel Industry Task Force conducts monthly seminars for manufacturers, contractors, retailers and business groups to help raise working standards and strengthen voluntary compliance with state and federal laws. Businesses that have participated tell us the seminars are useful and help to promote new levels of cooperation between government and the private sector. The ultimate beneficiary is New York's garment industry.

          Our seminars cover in depth the topics mentioned in this guide. The task force offers specific guidance in many areas, and we can tailor our sessions to the needs of any interested organization. We are on hand to help you, and we encourage employers and business organizations to schedule a seminar by phoning the Apparel Industry Task Force