[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2817 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
1st Session
S. 2817
To amend the Fair Labor Standards Act of 1938 to prohibit employers
from paying employees in the garment industry by piece rate, to require
manufacturers and contractors in the garment industry to register with
the Department of Labor, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 14, 2023
Mrs. Gillibrand (for herself, Mr. Booker, Mrs. Feinstein, Mr. Padilla,
Mr. Sanders, and Ms. Warren) introduced the following bill; which was
read twice and referred to the Committee on Health, Education, Labor,
and Pensions
_______________________________________________________________________
A BILL
To amend the Fair Labor Standards Act of 1938 to prohibit employers
from paying employees in the garment industry by piece rate, to require
manufacturers and contractors in the garment industry to register with
the Department of Labor, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Fashioning Accountability and
Building Real Institutional Change Act'' or the ``FABRIC Act''.
SEC. 2. PAYMENT AND LIABILITY REQUIREMENTS IN THE GARMENT INDUSTRY.
(a) In General.--The Fair Labor Standards Act of 1938 (29 U.S.C.
201 et seq.) is amended--
(1) by inserting after section 7 (29 U.S.C. 207) the
following:
``SEC. 8. REQUIREMENTS FOR THE GARMENT INDUSTRY.
``(a) Prohibition Against Payment by Piece Rate.--No employer shall
pay an employee employed in the garment industry, who in any workweek
is engaged in commerce or in the production of goods for commerce, or
is employed in an enterprise engaged in commerce or in the production
of goods for commerce, by the piece or unit, or by piece rate.
``(b) Hourly Rates.--
``(1) In general.--An employer shall pay each employee
employed in the garment industry, who in any workweek is
engaged in commerce or in the production of goods for commerce,
or is employed in an enterprise engaged in commerce or in the
production of goods for commerce, at an hourly rate that is not
less than the rate in effect under section 6(a)(1).
``(2) Incentive bonuses.--Nothing in this section shall be
construed to prohibit incentive-based bonuses for employees
employed in the garment industry.
``(c) Joint and Several Liability of Brand Guarantors.--
``(1) In general.--A brand guarantor who contracts with an
employer of an employee described in paragraph (2) for the
performance of services in the garment industry shall share
joint and several liability with such employer for any
violations of the employer under this Act involving such
employee while the employee is performing work with respect to
such brand guarantor.
``(2) Employees.--An employee described in this paragraph
is any employee employed in the garment industry who in any
workweek is engaged in commerce or in the production of goods
for commerce, or is employed in an enterprise engaged in
commerce or in the production of goods for commerce.
``(3) Subcontracts.--For purposes of paragraph (1), an
employer of an employee described in paragraph (2) includes any
other person who, through 1 or more subcontracts, subcontracts
with the employer of such an employee for the performance of
services in the garment industry.
``(4) Rule of construction.--Nothing in this subsection
shall be construed to preclude a determination of joint
employment, in the garment industry or otherwise, for entities
other than brand guarantors.
``(d) Nonapplicability.--Subsections (a) and (b) shall not apply
for purposes of an employee employed in the garment industry who is
covered by a bona fide collective bargaining agreement that expressly
provides for--
``(1) wages, hours of work, and working conditions of the
employee;
``(2)(A) a wage rate for all hours worked by the employee
in excess of 40 hours in a week that is greater than one and
one-half times the regular rate at which such employee is
employed; and
``(B) a minimum hourly rate of pay for the employee that is
not less than 10 percent more than the higher of--
``(i) the minimum wage rate under an applicable
State law; or
``(ii) the minimum wage rate in effect under
section 6(a)(1); and
``(3) a process to resolve disputes concerning nonpayment
of wages.
``(e) Regulations.--The Secretary may prescribe such regulations or
other guidance as may be necessary to carry out this section.
``(f) Definitions.--In this section:
``(1) Brand guarantor.--The term `brand guarantor' means
any person contracting for the performance of garment
manufacturing, including through licensing of a brand or name,
regardless of whether the party with whom the person contracts
performs the manufacturing operations or hires garment
contractors to perform the manufacturing operations.
``(2) Garment.--The term `garment' includes any article of
wearing apparel or accessory designed or intended to be worn by
an individual, including clothing, hats, gloves, handbags,
hosiery, ties, scarfs, and belts.
``(3) Garment contractor.--The term `garment contractor'--
``(A) means any person who, with the assistance of
an employee or any other individual, is primarily
engaged in garment manufacturing for another person,
including for another garment contractor, a garment
manufacturer, or a brand guarantor; and
``(B) includes a subcontractor that is primarily
engaged in garment manufacturing.
``(4) Garment industry.--The term `garment industry' means
the industry of garment manufacturing.
``(5) Garment manufacturer.--The term `garment
manufacturer' means any person who is engaged in garment
manufacturing who is not a garment contractor.
``(6) Garment manufacturing.--
``(A) In general.--The term `garment manufacturing'
means--
``(i) sewing, cutting, making, processing,
repairing, finishing, assembling, pressing, or
dyeing a garment, including a section or
component of a garment, designed for or
intended to be worn by an individual, which is
to be sold or offered for sale or resale;
``(ii) altering the design, or causing
another person to alter the design, of a
garment described in clause (i);
``(iii) affixing a label to a garment
described in clause (i);
``(iv) any other form of preparation of a
garment described in clause (i) by any person
contracting for such preparation; and
``(v) any other operation or practice as
may be identified in regulations issued by the
Secretary consistent with the purposes of this
section.
``(B) Exclusions.--The term `garment manufacturing'
does not include--
``(i) manufacturing of garments by an
individual who manufactures the garments by
himself or herself without the assistance of a
garment contractor, employee, or any other
individual;
``(ii) cleaning, altering, or tailoring any
garment, including a section or component of a
garment, after the garment has been sold at
retail; or
``(iii) any other form of manufacturing as
may be identified in regulations issued by the
Secretary consistent with the purposes of this
section.'';
(2) in section 15 (29 U.S.C. 215(a))--
(A) in subsection (a)--
(i) in paragraph (5), by striking ``and'';
(ii) in paragraph (6), by striking the
period at the end and inserting ``; and''; and
(iii) by adding at the end the following:
``(7) to violate section 8.''; and
(B) by adding at the end the following new
subsection:
``(c) For the purposes of subsection (a)(7), it shall be an
affirmative defense to an action under such subsection against a brand
guarantor (as defined in section 8(f)) if such brand guarantor shows no
knowledge of the violation of section 8 alleged in such action.''; and
(3) in section 16 (29 U.S.C. 216)--
(A) in subsection (b)--
(i) by inserting after the third sentence
the following: ``Any person who violates
section 8 shall be liable for such legal or
equitable relief as may be appropriate to
effectuate the purposes of such section,
including the payment of wages lost and an
additional equal amount as liquidated
damages.''; and
(ii) in the last sentence, by striking
``15(a)(3)'' and inserting ``8, 15(a)(3),'';
and
(B) in subsection (c), by adding at the end the
following: ``The authority and requirements described
in this subsection shall apply with respect to a
violation of section 8, as appropriate, and the person
in such violation shall be liable for such legal or
equitable relief as may be appropriate to effectuate
the purposes of such section, including the payment of
wages lost and an additional equal amount as liquidated
damages.''.
(b) Conforming Amendment.--Section 10 of the Fair Labor Standards
Act of 1938 (29 U.S.C. 210) is repealed.
(c) Effective Date.--The amendments made by this section shall take
effect on the date that is 6 months after the date of enactment of this
Act.
SEC. 3. REGISTRATION OF GARMENT MANUFACTURERS AND CONTRACTORS.
(a) Definitions.--In this section:
(1) Employee.--The term ``employee'' has the meaning given
the term in section 3 of the Fair Labor Standards Act of 1938
(29 U.S.C. 203).
(2) Garment contractor; garment industry; garment
manufacturer; garment manufacturing.--The terms ``garment
contractor'', ``garment industry'', ``garment manufacturer'',
and ``garment manufacturing'' have the meanings given such
terms in section 8(f) of the Fair Labor Standards Act of 1938
(29 U.S.C. 208(f)).
(3) Production employee.--The term ``production employee'',
with respect to a garment manufacturer or garment contractor,
means any employee of the manufacturer or contractor who is
engaged in the garment industry.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Labor, acting through the Undersecretary of the Garment
Industry appointed under section 4(b).
(b) Requirement To Register With the Department of Labor.--
Beginning on the date that is 6 months after the date of enactment of
this Act, no garment manufacturer or garment contractor shall engage in
the garment industry during any year unless the manufacturer or
contractor has registered for such year with the Secretary in
accordance with this section.
(c) Registration Requirements.--
(1) In general.--A garment manufacturer or garment
contractor registering under this section shall submit to the
Secretary--
(A) a form, in writing, containing the information
described in paragraph (2);
(B) photographic verification of the identify of--
(i) each owner or partner of the garment
manufacturer or garment contractor; and
(ii) in the case the garment manufacturer
or garment contractor is a corporation, each
officer of the corporation;
(C) verification that the garment manufacturer or
garment contractor has in effect a workers'
compensation insurance policy for all production
employees of the manufacturer or contractor; and
(D) payment of the applicable registration fee
described in paragraph (3).
(2) Information in form.--The information described in this
paragraph is each of the following:
(A) A statement of whether the garment manufacturer
or garment contractor is a sole proprietorship,
partnership, or corporation.
(B) The name, residential address, and phone number
of all production employees of the garment manufacturer
or garment contractor.
(C) The name, residential address, phone number,
and social security number of--
(i) each owner or partner of the garment
manufacturer or garment contractor;
(ii) if applicable, each officer of the
garment manufacturer or garment contractor; and
(iii) if applicable, each of the 10 largest
shareholders of the garment manufacturer or
garment contractor.
(D) The name, residential address, and social
security number of each person with a financial
interest in the business of the garment manufacturer in
the garment industry, and the amount of that interest
(if any).
(E) In the case in which the garment manufacturer
or garment contractor is a corporation, a statement
ensuring that no shares of the corporation are listed
on a national securities exchange or regularly quoted
in an over-the-counter market by one or more members of
a national or an affiliated securities association.
(F) A statement of how long the garment
manufacturer or garment contractor has been in business
in the garment industry.
(G) If applicable, the tax identification number of
the garment manufacturer or garment contractor.
(H) A statement of the status of the garment
manufacturer or garment contractor as a manufacturer or
contractor.
(I) A statement of whether the garment manufacturer
or garment contractor has contracted with a labor
organization, and, if so, the name and address of such
labor organization.
(J)(i) A statement as to whether, within the
preceding 3-year period, any of the following persons
or entities have been found by a court or the Secretary
to have violated the Fair Labor Standards Act of 1938
(29 U.S.C. 201 et seq.):
(I) The garment manufacturer or garment
contractor.
(II) Any owner of or any partner of the
garment manufacturer or garment contractor.
(III) In the case the garment manufacturer
or garment contractor is a corporation, any
officer of the corporation or any of the 10
largest shareholders of the corporation.
(ii) If any person or entity described in any of
subclauses (I) through (III) of clause (i) has violated
the Fair Labor Standards Act of 1938 within the period
described in such clause, a statement of the nature of
such violation and the date on which such violation
occurred.
(K) In the case of a contractor, a statement of
whether the contractor has subcontracted for the
cutting, sewing, dyeing, or assembling of textiles or
apparel or sections or components of apparel.
(3) Registration fee.--
(A) In general.--The registration fee required
under this subsection for each year shall be not less
than $200.
(B) Prorated fees.--The Secretary may prorate the
registration fee under subparagraph (A) for any
registration described in subsection (d)(2)(B)(i).
(C) Use.--The Secretary shall use the total amount
of each registration fee required under this subsection
for carrying out this section.
(d) Submission.--
(1) Consolidation.--Each division, subsidiary corporation,
or related company of a garment manufacturer or garment
contractor may, at the option of the manufacturer or
contractor, be named and included under 1 registration under
this section.
(2) Timing.--
(A) In general.--Except as provided under
subparagraph (B), each registration submitted under
this section shall be filed not later than the date
that is 6 months after the date of enactment of this
Act and annually thereafter on a date determined by the
Secretary.
(B) New manufacturers or contractors.--In the case
of a garment manufacturer or garment contractor that
begins garment manufacturing operations or enters into
a contract for such operations for the first time after
the date of enactment of this Act, the registration
required under this section shall be submitted--
(i) not later than 6 months after the date
on which the garment manufacturing operations
begin or the contractor enters into the
contract for such operations; and
(ii) annually thereafter on a date
determined by the Secretary.
(e) Certificates.--
(1) In general.--The Secretary shall issue a certificate of
registration to each garment manufacturer or garment contractor
that submits a registration meeting the requirements under this
section.
(2) Applicability.--
(A) In general.--Except as provided in subparagraph
(B), each certificate issued under paragraph (1) shall
be effective for a period of 12 months.
(B) New manufacturers or contractors.--A
certificate with respect to a registration submitted
under subsection (d)(2)(B)(i) shall be effective until
the following registration date as determined by the
Secretary.
(3) Posting.--Each garment manufacturer or garment
contractor receiving a certificate under paragraph (1) shall
post such certificate in a place where it may be read by any
employee of the manufacturer or contractor during the workday.
(4) Suspension or revocation.--The Secretary may suspend or
revoke a certificate of registration issued under paragraph (1)
if the garment manufacturer or garment contractor that
submitted the registration--
(A) has knowingly made any misrepresentation in the
application for such certificate; or
(B) has failed to comply with this Act or any
regulation under this Act.
(f) Recordkeeping.--The Secretary shall, through regulations,
establish requirements for recordkeeping for all garment manufacturers
and garment contractors engaging in the garment industry in order to
assist in enforcing the requirements of this section.
(g) Enforcement.--
(1) In general.--The Secretary may impose a civil money
penalty of not more than $50,000,000 against any person who
violates a requirement under this section.
(2) Considerations.--In assessing the amount of a penalty
under this subsection, the Secretary shall give consideration
to--
(A) the size of the business of the person;
(B) whether the violation of the person was
committed in good faith;
(C) the gravity of the violation;
(D) the history of any previous violations of the
person under this section; and
(E) the history of the person in complying with the
recordkeeping requirements under subsection (f).
(h) Regulations.--The Secretary may prescribe such regulations or
other guidance as may be necessary to carry out this section.
SEC. 4. UNDERSECRETARY OF THE GARMENT INDUSTRY.
(a) In General.--There is established in the Department of Labor
the Office of the Garment Industry (referred to in this section as the
``Office'').
(b) Undersecretary.--
(1) In general.--The Secretary of Labor shall appoint an
Undersecretary of the Garment Industry (referred to in this
section as the ``Undersecretary'') to head the Office.
(2) Functions.--The Undersecretary shall--
(A) carry out section 3 using sums appropriated
under subsection (c);
(B) carry out the national domestic garment
manufacturing support program under section 5; and
(C) provide assistance to the Administrator of the
Wage and Hour Division in enforcing section 8 of the
Fair Labor Standards Act of 1938 (29 U.S.C. 208).
(c) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated to
the Secretary of the Labor--
(A) $10,000,000 for fiscal year 2022, to establish
the Office and carry out the functions described in
subparagraphs (A) and (C) of subsection (b)(2); and
(B) $3,000,000 for each of fiscal years 2023
through 2027, to carry out the functions described in
subparagraphs (A) and (C) of subsection (b)(2).
(2) Availability.--Any sums appropriated under the
authorization contained in this subsection shall remain
available, without fiscal year limitation, until expended.
SEC. 5. NATIONAL DOMESTIC GARMENT MANUFACTURING SUPPORT PROGRAM.
(a) Definitions.--In this section:
(1) Eligible entity.--The term ``eligible entity'' means an
entity that is--
(A) a garment manufacturer that is incorporated in
and performs garment manufacturing within the United
States; or
(B) a nonprofit organization that provides
workforce development opportunities with respect to the
garment industry.
(2) Garment industry; garment manufacturer; garment
manufacturing.--The terms ``garment industry'', ``garment
manufacturer'', and ``garment manufacturing'' have the meanings
given such terms in section 8(f) of the Fair Labor Standards
Act of 1938 (29 U.S.C. 208(f)).
(3) Secretary.--The term ``Secretary'' means the Secretary
of Labor, acting through the Undersecretary of the Garment
Industry appointed under section 4(b).
(b) In General.--From amounts made available under subsections
(f)(2) and (h), the Secretary shall award grants, on a competitive
basis, to eligible entities to support garment manufacturing in the
United States.
(c) Application.--An eligible entity seeking a grant under this
section shall submit to the Secretary an application at such time, in
such manner, and containing such information as the Secretary may
require, including--
(1) a description of the project that the eligible entity
proposes to carry out using such grant; and
(2) an implementation plan of such project that reflects
the expected participation of, and partnership with, applicable
labor organizations and relevant community stakeholders.
(d) Award.--
(1) Selection.--In awarding grants under this section to
eligible entities, the Secretary shall give priority to
eligible entities--
(A) with a workforce that is covered by a
collective bargaining agreement;
(B) that are certified by a State in which such
eligible entity operates as a minority-owned business,
women-owned business, or veteran-owned business; or
(C) who have operated as a garment manufacturer
within the United States for more than 5 years.
(2) Amount.--The amount of a grant awarded under this
section may not be more than $5,000,000.
(e) Use of Funds.--An eligible entity receiving a grant under this
section shall use the grant funds to support--
(1) investments in training and workforce development for
employees within the garment industry;
(2) the acquisition of relevant tools and equipment for
garment manufacturing in the United States;
(3) the acquisition of, and capital improvements to,
facilities for garment manufacturing in the United States and
to promote the health and safety of employees in such
facilities; or
(4) efforts to assist in educating employees about rights
under this Act and other relevant Federal, State, or local
laws.
(f) Return of Funds.--
(1) In general.--An eligible entity receiving a grant under
this section shall return any unused amount of such grant (in
part or in full, as required by the Secretary) if the Secretary
determines the eligible entity violated any provision of this
Act, including any amendment made by this Act.
(2) Use of returned funds.--Amounts returned under
paragraph (1) shall be made available for grant awards under
subsection (b).
(g) Report.--Not later than 6 months after the date on which an
eligible entity receives a grant under this section, the eligible
entity shall submit to the Secretary a report that includes an account
of the use of grant funds awarded under this section.
(h) Authorization of Appropriations.--There is authorized to be
appropriated $50,000,000 to carry out this section.
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