S-5393-119
Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
Sponsored by Kirsten Gillibrand (D-NY)
What it does
The bill would amend the Fair Labor Standards Act to prohibit employers from paying garment industry employees by the piece or unit, and would require hourly pay of at least the federal minimum wage. Incentive bonuses based on output would still be allowed, and the ban would not apply to workers covered by a qualifying collective bargaining agreement. It would make brand guarantors jointly and severally liable for their contractors' violations (with a defense if the brand shows no knowledge of the violation), require garment manufacturers and contractors to register annually with the Department of Labor and pay a fee of at least $200, create an Undersecretary of the Garment Industry, and authorize $100 million in competitive grants for U.S. garment manufacturing. Civil penalties for violating the registration rules could reach $50 million per person, and other limits apply.
Who benefits
Garment workers now paid by the piece, who would gain an hourly wage floor at the federal minimum wage or higher. Unions, whose collective bargaining agreements would be a route to exemption and whose employers get grant priority. U.S.-based garment manufacturers, nonprofit workforce trainers, and minority-, women-, and veteran-owned garment businesses, who could receive grants of up to $5 million each. Compliant contractors that now compete against firms underpaying workers.
Who is hurt
Garment contractors and manufacturers, who would face registration paperwork, fees, recordkeeping duties, and possible penalties. Brands and licensors, who would take on shared liability for contractors and subcontractors. Fast workers who earn more under piece rates than they would under an hourly floor. Firms that might shift production abroad or cut jobs, which could reduce employment for some workers. Federal taxpayers would bear the authorized spending. Publicly traded firms and small shops would face the disclosure of owners' and employees' personal information, and employees' home addresses would be reported to the government.
Supporters argue
Supporters argue that piece-rate pay lets garment employers pay below the minimum wage in practice, citing Department of Labor investigations that have repeatedly found wage violations in garment shops. They contend that holding brands jointly liable and requiring registration closes the gap created by layers of subcontracting, and that grants and union priority would help domestic production rebuild with fair pay.
Opponents argue
Opponents argue that a ban on piece-rate pay removes a pay method many skilled sewers use to earn more than an hourly wage, and that the Fair Labor Standards Act already requires minimum wage under any pay method. They contend that brand liability, registration fees, collection of workers' home addresses, and penalties up to $50 million would burden small contractors and could push production overseas.
Constitutional context
Congress regulates wages and hours under the Commerce Clause, and United States v. Darby (1941) upheld the Fair Labor Standards Act's wage rules on that basis. The $50 million civil penalty and agency-imposed fines raise possible due process and Excessive Fines Clause questions, and SEC v. Jarkesy (2024) bears on whether agency-imposed penalties require a jury. The Secretary's open-ended power to expand the definitions through regulation also invites nondelegation and Loper Bright review.
Checks and balances
The bill would expand Department of Labor authority through a new office, registration power, and penalty authority, while courts, appropriations decisions by Congress, and the bill's affirmative defense for brands without knowledge of a violation serve as checks.
Historical precedent
California's AB 633 (2021) banned piece-rate pay for garment workers, and the federal Fair Labor Standards Act's "hot goods" provision (Section 15(a)(1)) has long been used against garment production, with the Department of Labor's Wage and Hour Division having long enforced garment-industry wage rules.