(May 25 | Washington, D.C.) – The International Corporate Accountability Roundtable (ICAR) applauds Senators Gillibrand, Booker, Warren, and Sanders for the introduction of The Fashioning Accountability and Building Real Institutional Change (FABRIC) Act. Following the lead of California’s Garment Worker Protection Act (or SB62), if passed, the FABRIC Act would hold brands and retailers jointly and severally liable for wage theft and would eliminate piece rate compensation for garment workers in the United States. Importantly, it would also establish a nationwide registry for the garment industry and institute record keeping requirements through the Department of Labor to ensure greater transparency and facilitate enforcement of garment worker protections.
Complex and opaque supply chains contribute to abusive working conditions in the garment industry. As a result of extensive subcontracting, intense industry competition, and the relentless pressure brands place on suppliers to drive down prices and speed up production, garment manufacturers face powerful incentives to cut costs and preserve their slim profit margins by slashing wages and undercutting labor protections. One way that garment suppliers—including those in the United States—attempt to do this is by paying their workers based on the number of garments produced per hour, which is known as Piece-rate pay. This method of payment often means that garment workers are being paid well below the federal minimum wage.
Despite the fact that brands drive abusive behaviors and practices like piece-rate pay further down supply chains through their purchasing practices, they are often shielded from liability because of the extensive and opaque layers of subcontractors between brands and the workers making their goods and experiencing the abuse. Garment factories in the U.S. can also evade liability themselves by remaining unregistered, allowing them to simply fire their workers, close shop, and reopen under a different name in another location.
“Transparency into supply chains is essential for holding brands accountable for wage and labor abuses. Factories are less likely to avoid liability if they’re registered with the DoL, which the FABRIC Act requires them to do. The FABRIC Act also establishes hourly pay for garment workers, ensuring that garment workers in the U.S. are paid at least the federal minimum wage.” Says Noor Hamadeh, Advocacy Counsel at ICAR.
By bringing garment factories in the United States and their practices out of the shadows, prohibiting piece rate compensation, and establishing new liability requirements for brands and retailers for wage theft in their U.S. supply chains, passing the FABRIC Act would be an important step toward improving conditions throughout garment supply chains in the United States.