Garment makers and contractors would register and follow hourly pay rules

Employers would stop paying covered garment workers by the piece and pay them at least the federal minimum wage by the hour. The rules cover garment employees who work in interstate commerce or for a business engaged in it. Production bonuses based on output would remain allowed. The pay rules would exempt workers covered by a genuine union agreement that sets wages, hours, and working conditions; pays overtime above 1.5 times regular pay; sets hourly pay at least 10% above the higher state or federal minimum wage; and provides a way to resolve unpaid-wage disputes. These pay rules would take effect six months after enactment.

People and companies that contract for garment manufacturing would share responsibility with employers for federal wage and hour violations tied to their work. The violation must involve a covered garment worker doing work for the contracting party. Contracting through one or more subcontractors would not remove this responsibility. In certain cases under the bill’s garment rules, a contracting brand could defend itself by showing it did not know about the violation. This rule would take effect six months after enactment.

Garment manufacturers and contractors would register each year with the Labor Department to operate. The rule covers garment manufacturers and contractors doing garment industry work. Applications would list workers, owners, financial interests and their amounts, and specified wage-law violations from the previous three years. Businesses would provide identity checks, proof of workers’ compensation insurance, and a fee of at least $200. For violations of these registration rules, the Labor Secretary could impose a civil fine of up to $50 million after considering business size, good faith, seriousness, and past compliance. Registration would begin six months after enactment. A new manufacturer would file within six months of starting garment manufacturing; a new contractor would file within six months of first contracting for that work.

If Congress provides funding, the Labor Department would award competitive grants for garment manufacturing in the United States. Eligible applicants would be garment makers incorporated and manufacturing in the United States, or nonprofits offering garment workforce training. Grants would be capped at $5 million and could pay for training, equipment, facilities, workplace safety, and worker education. The department would favor applicants with union agreements, certain state business certifications, or more than five years of U.S. garment manufacturing experience.