[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 contracto