Random Government Investigations of Targeted Industries

The Wage and Hour Division (WHD) of the federal Department of Labor has published a 2022 Southern California Garment Worker Survey after random investigations of 50 area contractors.  The results were abysmal:

• More than 50% paid workers off the books;
• 80% violated the federal Fair Labor Standards Act;
• 64% did not have accurate time and pay records;
• Below minimum wage pay rates went as low as $1.58/hour.

The WHD also found that 32% of the sewing contractors continued to pay by piece rate in violation of 2016 California law. See, Piece Work Compensation Is a Wreck Waiting to Happen; The Perils of New Labor Code Section 226.2 for Trucking, Auto Repair and Other Industries (December 4, 2015).

These federal audits netted $892,000 in back wages and liquidated damages.

While worker complaints against a specified company trigger many such federal or state inquiries, these 2022 WHD audits were random, targeting an industry notorious for its employment law abuses.

Take-Away: Whatever the industry, no employer should presume itself outside the government’s scrutiny over its workplace legal compliance. Regular management review of its  pay and related practices to ensure conformity with current standards is the best insurance against potentially crushing state or federal audit findings.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• Cautionary Tale Episode 64: Dept. of Labor Half-Million Assessment Against Four California Care Homes: Feds Target Caregiving Industries (March 3, 2023)

• For Whom the Bell Tolls…Knock, Knock: When It’s Your Turn For a Government Payroll Audit (April 5, 2019)

• Cautionary Tales Episode 17: Labor Enforcement Task Force Targeting “Underground Economy” (September 26, 2018)

Helena Kobrin
April 12, 2023