Name Brands Help Cheat Workers Out of $5.3 Million

July 25, 2008

Recently, there have been numerous articles posted on this blog citing sweatshop conditions in other countries, such as Bangladesh, India, and China. Unfortunately, the New York State Department of Labor has found comparable workers’ rights violations right here in the local area of Long Island City, Queens, New York, where a manufacturer violated the state’s minimum wage and overtime laws by paying by piece rate, falsified timesheets, refused to pay overtime, and coached employees to lie to investigators (NYS Dept. of Labor). Jin Shun and Venture 47, and even more recently, Garlee NY Incorporated are all names of one garment contractor located at 47-51 33rd Street. The factory changed its name several times to try to elude investigation (NYT).

According to state officials, most employees, virtually all of them Chinese immigrants, were paid just $250 when they worked their typical 66-hour, six-day weeks, amounting to $3.79 an hour, far below the state’s $7.15-an-hour minimum wage. (NYT)

The factory cheated over 100 employees out of $5.3 million (NYT). In addition, management of the factory had devised strategies to deceive investigators, telling their employees to memorize written responses to anticipated questions.

State officials said that the instructions given to employees, written in English and Mandarin, told them that if government inspectors ever asked them how many hours they worked each week, they were to respond, “Not sure, depends on the workload.”

The instructions told the workers that if inspectors asked how much they earned, they should respond, “I don’t remember, because sometimes I work more hours and sometimes less.”

The instruction sheet told the workers that if they were asked, “What is your hourly wage?” they were to answer, “Not sure, but always over $7.75 depending on the job complexity.” Even though the workers were paid at a fixed rate per piece of work performed and partly in cash, they were told to answer that they were always paid by the hour and through direct deposit. (NYT)

The garment contractor manufactures women’s apparel for well-known retailers, such as Macy’s Gap, Banana Republic, Express, Victoria’s Secret, Urban Apparel, and Limited and Coldwater Creek (Crain’s New York Business). However, this isn’t the first time that these retailers have found themselves in this situation (see article). Sweatshop conditions have appeared numerous times in the factories that these retailers have contracted. This is no coincidence. “Our message to retailers and manufacturers is that cursory inspection in monitoring factories is not enough…While you may require your suppliers to abide by strict codes of conduct, these codes do workers no good if they are not aggressively enforced,” said Commissioner M. Patricia Smith of the Labor Department (NYS Dept. of Labor).Variables that have remained constant in each exposure of unlawful labor practices are the failed enforcement of corporate social responsibility by the brands and the auctioning of contracts by the brands for the lowest price per piece. These factors help create the circumstances that encourage sweatshop conditions in factories.

One of the ways that the Department of Labor is holding the brands accountable and liable for factory conditions is by tagging the garments made under unlawful conditions. Special tags have been placed on more than 10,000 products, explicitly stating the labor violations (NYT). “Under the ‘hot goods law,’ it is a misdemeanor for anyone other than the Department or the consumer to remove such labels (NYS Dept. of Labor). On Wednesday, Urban Apparel paid $60,000 to have the tags removed. This method punishes both the retailer and factory. The factory is punished indirectly through a loss of business from the retailer. However, a loss in business affects the workers as well, as it is the workers who will see a decrease in the amount of work and hours. It is the workers who will see the decrease in their income. This is why corporate social responsibility is important to the workers. The brands are in the position of power to work with the factories to change the conditions. Therefore, they should take the opportunity to do so; otherwise, there will be an increase of 100 worker unemployed in New York City after Jin Shun goes bankrupt from the lack of business and another factory will continue the sweatshop work for these brands.