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Seven Los Angeles-area garment manufacturers and contractors are facing a total of $275,835 in fines for allegedly operating without workers’ compensation insurance coverage.
The citations followed inspections of 18 garment manufacturers in the LA area. Fourteen of the inspected businesses also face a total of $34,300 in fines for alleged garment regulation violations, including failure to register as a garment manufacturer, display the garment registration, or maintain required records, the California Labor Commissioner’s Office said in a Sept. 14 statement.
The businesses employ a total of 170 workers in the Los Angeles garment district, according to the commissioner’s office.
The largest workers’ compensation citation went to R&R Fashion Inc., which is facing a fine of $159,000, the citation documents show. Buya USA Collection Inc. faces the second-largest workers’ compensation fine, at $75,000. Bloomberg BNA wasn’t able to contact either company on Sept. 15.
Investigators also confiscated 5,725 illegally manufactured garments with an estimated street value of $103,000 from six of the businesses, the commissioner’s office said.
It’s significant that the commissioner’s office confiscated garments as well as issuing citations, said Matt DeCarolis, an attorney with Bet Tzedek, a Los Angeles-based nonprofit legal services corporation.
That’s because some companies hit with citations “just shut down and ignore the citation,” DeCarolis said. Confiscating garments for this reason can be a more effective deterrent against unlawful behavior, he told Bloomberg BNA.
“Confiscating garments sends a message–it goes right to the bottom line,” he said.
“Garment manufacturers who thwart the law threaten workers’ rights and undermine honest employers in the industry, making it difficult for legitimate businesses to succeed,” Labor Commissioner Julie A. Su said in a statement.
“These illegal entities should take note: We will shine a light on the underground economy and those who contract with unregistered contractors will also be held accountable,” Su said.
California’s Garment Manufacturing Act requires industry employers to register with the commissioner and to provide workers’ compensation insurance coverage. Garment manufacturers that contract with unregistered entities are automatically deemed joint employers of the workers in the contract facility, the commissioner’s office said.
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