California Cites Garment Contractors $570K, Some Lacked Workers’ Comp

Source: https://www.insurancejournal.com

The California Labor Commissioner’s Office has cited six Los Angeles area garment contractors $573,704 for labor law violations after uncovering a scheme where the contractors illegally operated under one license to avoid compliance.

Four of the contractors did not have valid workers’ compensation coverage for their employees.

“Shared use of a garment manufacturing registration is illegal, and it gave these contractors an unjust economic advantage over law-abiding garment businesses,” Labor Commissioner Julie A. Su said in a statement. “Sweatshop operators attempting to game the system at the expense of their competitors often do so on the backs of their own workers.”

The Labor Commissioner’s office discovered that most of the 57 employees at the contractors’ building downtown on South Broadway worked up to 65 hours a week for less than minimum wage. Two workers, ages 15 and 16, were operating industrial sewing machines in violation of California’s child labor laws.

The Labor Commissioner’s investigation began in July. Investigators visited the worksite, operating under the name Pure Cotton Inc. Owner Kyung Ho Choi told investigators he collected rent but was not involved in the making of garments. His brother-in-law, Kuong Chan Kim, claimed that all of the workers were employed by his company, Union Supply Inc., which was registered as a garment manufacturer.

Further investigation reportedly revealed four other garment manufacturing contractors were operating in the building without garment licenses or workers’ comp insurance.

Kim charged each contractor a fee for the use of his license and insurance coverage, which allegedly concealed the actual number of workers.

The Labor Commissioner’s office issued stop work orders to the four contractors operating illegally under the Union Supply Inc. license and their inventory was confiscated. They were cited for violating wage statement and garment registration provisions, and failure to cover employees with workers’ comp insurance.

Cindy Soon Yun, with 20 employees, was cited $118,600. She was also cited for violating child labor laws
Sun Park, with 10 employees, was cited $158,855
Pil Chang, with eight employees, was cited $37,450
Francisco Tecum Son, with four employees, was cited $18,000
Union Supply, Inc., with 15 employees, was cited $240,300
Pure Cotton, Inc., which has no employees, was cited $500

The Labor Commissioner’s office is currently pursuing wage theft investigations of the contractors.

The Garment Manufacturing Act of 1980 requires that all industry employers register with the Labor Commissioner and demonstrate adequate character, competency, and responsibility, including workers’ comp coverage. Garment manufacturers who contract with unregistered entities are automatically deemed joint employers of the workers in the contract facility. Clothing confiscated from illegal operations cannot be sold, and will be donated to non-profit organizations in the Los Angeles area.



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