The California Labor Commissioner’s Office has cited six Los Angeles garment contractors a combined $573,704 for labor law violations after uncovering a scheme where the contractors illegally operated under one license to avoid compliance.
The Labor Commissioner’s Office discovered that most of the 57 employees at the contractors’ building on South Broadway in downtown Los Angeles worked up to 65 hours a week for less than minimum wage. Two workers, ages 15 and 16, were operating industrial sewing machines in violation of California’s child labor laws. Four of the contractors did not have valid workers’ compensation coverage for their employees.
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“Shared use of a garment manufacturing registration is illegal and it gave these contractors an unjust economic advantage over law-abiding garment businesses,” Labor Commissioner Julie A. Su said. “Sweatshop operators attempting to game the system at the expense of their competitors often do so on the backs of their own workers.”
The Labor Commissioner’s investigation began in July after receiving a lead from the Garment AB 633 Unit. Investigators visited the worksite, operating under the name Pure Cotton Inc., where owner Kyung Ho Choi allegedly told them he collected rent but was not involved in the making of garments. His brother-in-law, Kuong Chan Kim, claimed that all of the workers were employed by his company, Union Supply, Inc., which was registered as a garment manufacturer, the Labor Commission’s Office said.
Further investigation revealed four other garment manufacturing contractors were operating in the building without proper licenses or workers’ compensation insurance. Kim allegedly charged each contractor a fee for the use of his license and insurance coverage, which concealed the actual number of workers.
The Labor Commissioner’s Office issued stop work orders to the four contractors operating illegally under the Union Supply Inc. license and their inventory was confiscated. They were cited for violating wage statement and garment registration provisions, and failure to cover employees with workers’ compensation insurance.
Cindy Soon Yun, with 20 employees, was cited $118,600. She was also cited for violating child labor laws.
Sun Park, with 10 employees, was cited $158,855; Pil Chang, with eight employees, was cited $37,450; Francisco Tecum Son, with four employees, was cited $18,000; Union Supply Inc., with 15 employees, was cited $240,300, and Pure Cotton Inc., which has no employees, was cited $500.
The Labor Commissioner’s Office is currently pursuing wage theft investigations of the contractors. The Garment Manufacturing Act of 1980 requires that all industry employers register with the Labor Commissioner and demonstrate adequate character, competency, and responsibility, including workers’ compensation insurance coverage. Garment manufacturers who contract with unregistered entities are automatically deemed joint employers of the workers in the contract facility. Clothing confiscated from illegal operations cannot be sold, and will be donated to non-profit organizations in the Los Angeles area.
In 2014, Labor Commissioner Su launched the “Wage Theft is a Crime” multilingual public awareness campaign. It defines wage theft and informs workers of their rights and the resources available to them to recover unpaid wages or report other labor law violations.
The Division of Labor Standards Enforcement, or the Labor Commissioner’s Office, is the division within the Department of Industrial Relations with wide-ranging enforcement responsibilities, including adjudicating wage claims, inspecting workplaces for wage and hour violations, investigating retaliation complaints and educating the public on labor laws.
