Authorities Crack Down on Small Garment Manufacturers

Attacking what they say is a major part of Southern California’s underground economy, labor investigators have launched a blitz of surprise inspections of small garment-manufacturing firms and related contracting shops.

State and federal authorities say the inspections, which began Tuesday and are expected to continue all week, will zero in on about 300 firms in Los Angeles County suspected of undercutting competitors by violating labor laws.

The businesses are under scrutiny for possible violations of, among other things, minimum wage, overtime pay and workers’ compensation insurance laws and of state registration requirements.

As of late Wednesday, investigators had few results available, but they said their initial checks turned up numerous workers’ compensation, registration and record-keeping violations.

One unidentified firm was under investigation for allegedly employing as a salesclerk a minor who lacked a work permit, a girl believed to be 13 or 14 years old. Under California law, anyone under age 18 holding a job must have a work permit, and permits are issued only in special instances to children younger than 14.

Despite their small size, the clothing manufacturers under investigation collectively pose substantial unfair competition to larger companies in Southern California’s vast apparel industry, said Jose Millan, state labor commissioner.

Millan said many of these small rogue firms cut their costs and produce lower-cost clothing by exploiting their workers.

“They think they’re too small for anyone to take notice of them, but actually they’re causing a good bit of damage to the legitimate garment industry,” he said.

Officials said most of the firms being investigated employ from two to six people. They generally make garments for sale in small shops in Los Angeles’ garment district and in ethnic enclaves throughout California and in other states.

Also being inspected are the fabric-cutting and sewing contractor shops that do most of the production work for the small manufacturing firms.

Among the first 49 companies inspected, officials said, 22 were found to have failed to register with the state as garment manufacturers, 16 were determined to have failed to purchase workers’ compensation insurance, and 11 were judged to be improperly paying workers in cash without making proper payroll deductions.

Authorities seized merchandise from dozens of firms allegedly violating labor laws and began imposing fines under state statutes. The fines, however, were relatively small.