SACRAMENTO – California fashion retailers could be facing more labor litigation if a controversial bill – one that could essentially put employers in the industry out of business – is passed.
Senate Bill 1399, introduced by California Sen. Maria Elena Durazo (D-Los Angeles), makes retailers liable for the wages of workers that produce the clothing items they sell, according to the California Chamber of Commerce (CCOC). This bill would make it so that clothing retailers could not avoid any liability for wage or labor violations in California.
"There are over 30 million people seeking unemployment," the California Chamber of Commerce said in a letter to the state Senate Committee on Appropriations. "Now is not the time to impose the type of burdens proposed in SB 1399 on employers, especially when it has nothing to do with addressing COVID-19 or improving the economy. We would urge the committee and author to delay consideration of this proposal until businesses have had a chance to recover from this crisis."
SB 1399 would impose joint and several liabilities on companies that see a person who "contracts with a 'brand guarantor'" would be held responsible for wages, hour violations, penalties and many other coverages, the CCOC said in the letter. The bill would also impose more requirements that enhance the Private Attorneys General Act threats to the industry employers.
The bill will "prevent retailers from escaping liability for wage and labor violations that may not be happening under their roofs but are, nonetheless, occurring within their supply chains," according to The Fashion Law (TFL). "More than that, it will largely outlaw the commonly used by-the-piece wage structure, in which individuals are paid in accordance with the number of goods they produce in favor of an hourly wage system."
The bill, which has been met with conflicting responses, has been approved by the California State Senate Committee on Labor, Public Employment and Retirement, TFL reported. The state senate has also approved the bill, but several other organizations are pushing back strong against the bill such as the California Fashion Association, which includes fashion companies like Alibaba, Topson Downs and others.
The bill is headed for the State House and, if approved, will go to Gov. Gavin Newsom for a signature.