U.S. MOVES TO BRING ANTI-SWEATSHOP DRIVE TO NEW YORK VENDORS

Byline: Joanna Ramey

WASHINGTON--Intensifying their crackdown on sweatshops, federal authorities are out to secure the cooperation of New York apparel vendors. They want a detailed commitment and they want it in writing.
According to Bruce Sullivan, the Labor Department's top wage enforcer in New York, "it's been like pulling teeth" to get garment manufacturers in the city to aggressively monitor their sewing shops for compliance with federal labor laws. In fact, Labor Department investigators have found no takers after three years of trying to get New York-area manufacturers to commit to a detailed contractor monitoring program.
Labor officials are now trying to change this record with a stepped-up garment industry enforcement effort that was announced Monday. The program, which will also focus on the restaurant industry, will add three wage inspectors for these industries to the one full-time person currently in the area. TARGET, or The Apparel/Restaurant Guidance and Enforcement Team, will work closely with a state Apparel Industry Task Force of 20 investigators.
What Labor officials want New York manufacturers to do is sign what they call "the long form." This is a lengthy contract designed for vendors whose contractors are found with repeated wage violations. The form details a plan for checking contractors' time cards, auditing payrolls, conducting periodic interviews with sewing shop workers and undertaking other procedures to insure that sewing shops are paying employees the federal minimum wage and overtime. Until now, the agency has extracted only verbal assurances from manufacturers that they will monitor their contractors, or has had them sign a document known as "the short form," stating simply that they acknowledge that a contractor has violated wage laws and they will take steps to insure future compliance.
Such measures haven't had much effect on the proliferation of sewing shops that underpay their workers, said Sullivan, assistant regional administrator for Labor's wage and hour division in New York.
"We haven't had any trouble finding violators among contractors," he said.
Essentially, Labor wants to duplicate the success it has had with the long form in the Los Angeles garment district, which rivals New York in size with about 120,000 sewers. While plenty of California manufacturers have balked at signing on to a detailed inspection program, investigators have won over several prominent industry players, such as Guess, Chorus Line and Z. Cavaricci.
Unlike the situation in New York, there has been more pressure on California manufacturers to monitor contractors found to be repeat wage violators, thanks largely to a joint federal-state apparel task force there.
The new TARGET effort in New York is designed to have results similar to the West Coast's. Although the New York program for now is a federal initiative, it does plan to work with the state. In California, federal and state investigators go on strikes together.
But as in California, the cudgel that New York labor inspectors are holding over manufacturers is a Depression-era clause in the Fair Labor Standards Act called the "hot goods" provision, making it illegal to trade in goods made in violation of the law. It gives officials the authority to freeze shipments of apparel made in sweatshops. Because of this threat, manufacturers can be pressured to pick up back wages owed by their contractors.
Signing a long form doesn't absolve manufacturers of responsibility if a contractor subsequently shortchanges its workers, Sullivan said, but having a Labor-approved monitoring program in place goes a long way in showing good will on the part of the manufacturer. It can help shield the manufacturer from harsher consequences. In the absence of a formal compliance program, manufacturers run the risk of being found in contempt of court if contractors continue to be cited, since Labor officials can argue the manufacturers knowingly dealt with sewing shops with a record of producing hot goods.
Long-form agreements in California typically run about 15 pages. The short form is about 1 1/2 pages.
"I think initially the long form is intimidating when a manufacturer's counsel reviews the document," Sullivan said. "They aren't enamored with the position the long form puts their clients in because it's a document we can hold over their head."
Sullivan said he has lost patience with two New York manufacturers and is ready to take them to court if they don't sign a long form. The manufacturers, whom Sullivan wouldn't identify, have each had six contractors in the last year cited for underpaying workers.
"Here's six times when we told them how they could comply with the law and it still keeps recurring," Sullivan said.
During the last nine months, the agency--with just one full-time garment inspector--has documented 60 New York contractors as underpaying workers. Thirty-four New York manufacturers who used these sewing shops were contacted, 32 of whom agreed either verbally or by signing a short form to monitor their contractors. About $750,000 in back wages was collected, about half from manufacturers whose shipments were being held up by the investigations.
Tackling the New York garment industry is a daunting task, Labor Department and industry officials agree. They readily note that like Los Angeles--where early this month sweatshops hit the headlines when a plant that is alleged to have kept workers in virtual slavery was raided in suburban El Monte--New York has the same ingredients that help substandard apparel contractors flourish. They are immigrants willing to work for low wages, and a demand by manufacturers and retailers for garments at the lowest possible price.
"Between a legitimate shop and El Monte there is a vast sea of various operations," said Bruce Herman, president of Garment Industry Development Corp., which, with a $1 million annual budget funded by the state, city, labor and management, works with New York-area contractors to teach them good apparel-making and management practices. "New York, because of the size of its operations, has its share of violators."
There are an estimated 100,000 apparel production workers in New York City and thousands more across the Hudson River in northern New Jersey. Competition among the sewing shops is considered fierce, and many operators are willing to low-bid contracts, even if it means sacrificing workers' wages.
"There have been cases of flat-out inability to pay workers six to eight weeks of wages," Sullivan said. "But because many of these workers are here illegally, it's not brought to our attention until the contractors have finally closed the doors down.
"In New York, the reality is that most contractors don't have the wherewithal to come into compliance. They are immigrants who just a few months before were sitting behind a machine and now they are running their own shops," Sullivan said. "If the last deal they cut was too unfavorable to pay workers the minimum wage or pay the payroll at all, their operation then goes south quickly. They have no way to bring things around. That is what is happening in the industry now."
While supportive of Labor's goal to eradicate sweatshops, manufacturers who have entered into a verbal agreement with the agency to monitor contractors underscored the difficulty accounting for their sewing shops.
For example, auditing a contractor is impossible for a manufacturer that shares the contractor with other makers, according to Jay Levy, president of Accent Ltd., with volume of $10 million to $12 million. Labor officials last fall notified Levy of one contractor that shut its shop without paying workers.
"How can you ask a Chinese contractor to show me your books? They are not our employees," says Levy, who uses five contractors. "It's a lot easier to tell manufacturers who are making $30 million to $40 million to audit their contractors. Big companies have the power and can control production in one shop."
Studio 1, a women's wear maker caught with an errant contractor who sent apparel home with workers to be sewn, is relying on a pledge by its 20 to 25 sewing shops to pay their workers to insure future compliance. Otherwise, said Monsour Zar, a partner in the business, "I cannot control the contractor. It is out of my hands."
Zar said because of language barriers, it's difficult to know whether operators understand when they're told about properly paying workers. He said some contractors have been angered by Studio 1's insistence they sign wage-compliance agreements.
"We are forcing them," he said.
At women's sportswear maker Copy Cats, which has signed a short form with the agency, contractors are now required to submit to payroll audits.
"We've been trying vigorously to comply with the Department of Labor," said production manager Richard Berardelli. The company uses six contractors who work almost exclusively for Copy Cats and are offered the same price to avoid bidding wars, which are often cited as a root cause for sweatshops.
"It's a very difficult task for us to constantly monitor their books. It has added a burden, but it has helped to make the working environment a little better," Berardelli said. "The ones who don't liberally work with us, we don't do business with them."
Better sportswear manufacturer Kazu Apparel Group Inc., which produces abroad, learned of the complexity of wage enforcement among contractors last year, when it had to produce an order domestically because of a filled quota for women's pants. The sewing shop it chose came widely recommended by other high-end manufacturers. But when one of the contractors' standing clients filed for Chapter 11 and sewers were not paid, Labor investigators seized the shops' apparel. Even though Kazu had paid its $45,000 bill to the sewing shop, its pants were confiscated. As a result, the company missed its shipment, taking a loss of $100,000.
"It was an expensive lesson," said Kazu president Roland Peralta. "Clearly, we weren't aware of the bylaws and rules and regulations of manufacturing domestically."
Also working New York's garment beat is the state's Apparel Industry Task Force, which has about 20 people combing the garment districts of midtown Manhattan, Chinatown and Sunset Park in Brooklyn. Tom Glubiak, chief labor standards investigator for the task force, said his troops in recent months have been focusing on making manufacturers more responsible for their contractors.
"Some of them are getting the picture," Glubiak said. "The industry is such that you have some real good manufacturers and contractors, but existing between them you have some sweatshops."
In addition to the 4,000 contractors that are registered in New York with the state, Glubiak said his agency estimates 1,500 to 2,000 shops operate underground with 10 or fewer employees. Many are in the Chinese community in Sunset Park, in rooms adjacent to garages or storefronts. One Chinese-speaking investigator is now assigned to walk the streets of these neighborhoods to find violators.
Glubiak and others interviewed said the solution to preventing sweatshops involves more enforcement, in addition to widespread education of operators about how to efficiently and properly run their shops.
"There are certain changes that have to be made that can give us broader powers," Glubiak said. "Right now we can't put a lock on the door of a contractor in violation. But the biggest thing is that manufacturers really have to look at where their garments are made. They should seek to have them made under conditions that are humane and cost-efficient."

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