H.R. 10372: Fashioning Accountability and Building Real Institutional Change Act

This bill would change federal labor rules for the garment industry and create new federal programs to monitor and support it.

Pay rules for garment workers

The bill would ban employers in the garment industry from paying workers by the piece or by the unit made. Instead, covered workers would have to be paid at least an hourly wage that is no lower than the federal minimum wage.

It would still allow bonus pay based on production, as long as workers are paid hourly wages too.

The bill would not apply to workers covered by a qualifying union contract if that contract includes:

• terms on wages, hours, and working conditions,
• overtime pay that is above the federal standard,
• a minimum hourly wage that is at least 10% above the higher of the state or federal minimum wage, and
• a process for resolving wage disputes.

Brand and subcontractor liability

The bill would make certain brands and other companies that contract for garment manufacturing potentially responsible along with the direct employer for wage-and-hour violations involving the workers doing the work for them. This would apply even when the work is done through subcontractors.

In some cases, a brand guarantor could avoid liability by showing it had no knowledge of the violation.

New registration system for garment businesses

Starting six months after enactment, garment manufacturers and garment contractors would have to register each year with the U.S. Department of Labor in order to operate in the garment industry.

As part of registration, they would need to provide detailed information, including:

• business structure and ownership information,
• names and contact information for production employees, owners, officers, and some shareholders,
• proof of workers’ compensation insurance,
• information about labor organization contracts,
• information about past wage-law violations, and
• information on subcontracting arrangements.

Registered businesses would have to pay at least a $200 annual fee, and the Department of Labor would issue a certificate of registration that must be posted where workers can see it.

The Secretary of Labor could revoke or suspend a certificate for false statements or failure to comply with the law. The bill also directs the Labor Department to set recordkeeping rules and allows civil penalties of up to $50 million for violations of the registration requirements.

New federal office and oversight

The bill would create an Office of the Garment Industry within the Department of Labor and add an Undersecretary of the Garment Industry to run it. That office would help carry out the registration program, assist enforcement of the new garment-industry wage rules, and run a domestic garment manufacturing support program.

Support program for U.S. garment manufacturing

The bill would authorize federal grants for certain U.S.-based garment manufacturers and nonprofits that provide workforce development in the garment industry. The grants could be used for:

• training and workforce development,
• tools and equipment,
• facility acquisition and improvements, including health and safety upgrades, and
• education about worker rights under this law and related laws.

Priority for grants would go to entities with unionized workforces, some minority-owned, women-owned, or veteran-owned businesses, and businesses that have operated in the U.S. for more than five years. Grants would be capped at $5 million each, and the bill authorizes $100 million for the program.

Timing

The main wage and liability changes would take effect six months after enactment. The registration requirement would also begin six months after enactment.

Relevant Companies

None found