LOS ANGELES — Wet Seal Inc. and Champion USA, a division of Sara Lee Corp., have agreed to pay almost $700,000 to 472 garment workers who said they didn’t get paychecks from a contractor for the companies.

The employees, sewers and cutters, worked for Los Angeles-based MiAngels Apparel Inc., which they said did not compensate them from June 5 to July 16. MiAngels is no longer in business. The workers filed a complaint with the California Department of Industrial Relations.

Wet Seal, the Foothill Ranch, Calif.-based chain of 564 stores, paid $181,000 in the case, though the company said it was not legally liable for the wages.

“It’s part of our wider initiative to only do business with vendors who are treating their workers with relevant labor and human rights laws,” said Helen Rotherham, Wet Seal’s vice president of investor relations and communications.

Champion, the athletic wear maker, paid $514,000. Los Angeles-based Textiles Inc. paid an additional $28,000.

“We don’t condone practices that don’t adhere to our fair treatment standards and believe paying the workers was the right thing to do,” said Peggy Carter, spokeswoman for Sara Lee Branded Apparel.

The payout wasn’t the first for Wet Seal, which has seen sales decline for the last seven quarters. It paid as much as $1.3 million to settle a store managers’ suit on overtime in January. In the same month, it also paid $90,000 to four garment workers seeking back wages from one of the company’s contractors.

“It’s an onerous responsibility for retailers to have to know the ins and outs of their entire sourcing operation,” said Jeffrey Van Sinderen, retail analyst at B. Riley & Co. “I don’t think they should have had to pay.”

— Nola Sarkisian-Miller

This story first appeared in the July 30, 2004 issue of WWD. Subscribe Today.