Surprise! Forever 21 likely utilizes unethical and irresponsible labor practices, according to the U.S. Department of Labor (“DOL”). A recent investigation by the department’s Wage and Hour Division, conducted under a multiyear enforcement initiative in Southern California’s garment industry, revealed evidence of significant violations of the Fair Labor Standards Act’s minimum wage, overtime and record-keeping provisions by vendors supplying goods to Forever 21.According to the DOL, Forever 21 has reportedly failed to provide documentation regarding its apparel contractors and manufacturers, which the DOL requested (via a subpoena) back in August. As a result, the Department of Labor’s Regional Office of the Solicitor in Los Angeles has filed suit in the U.S. District Court for the Central District of California (as Forever 21 is headquartered in Los Angeles). The question at issue: whether Forever 21 has complied with the Fair Labor Standard Act’s minimum wage, overtime, and record-keeping laws.
Ruben Rosalez, the regional administrator for the Labor Department’s division in the West said: “When companies like Forever 21 refuse to comply with subpoenas, they demonstrate a clear disregard for the law, and the Labor Department will use all enforcement tools available to recover workers’ wages and hold employers accountable.” Rosalez further elaborated on the DOL’s pending investigation of the fast fashion giant, saying: “Since 2008, the department has found about a dozen manufacturers that work with Forever 21 have sweatshop-like conditions.”
The Wage and Hour Division historically has found repeated and widespread violations of the FLSA’s minimum wage, overtime and record-keeping provisions in Southern California’s garment industry. The division’s enforcement initiative is concentrating on employers in Los Angeles and Orange counties, as well as those operating out of large garment buildings in Los Angeles’ Fashion District. In the past five years alone, the division’s Los Angeles, San Diego and West Covina offices have conducted more than 1,500 investigations under the initiative. Ninety-three percent of these investigations uncovered violations, and the division found more than $11 million in back wages due to approximately 11,000 workers.
The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. In general, “hours worked” includes all time an employee must be on duty, or on the employer’s premises or at any other prescribed place of work, from the beginning of the first principal work activity to the end of the last principal activity of the workday. Employees in the garment industry are typically paid a fixed amount for each garment they produce, an amount that is often so low workers’ wages fall below the federal minimum wage and do not meet overtime compensation requirements.
Additionally, the law requires that accurate records of employees’ wages, hours and other conditions of employment be maintained, and prohibits employers from retaliating against employees who exercise their rights under the law.
Chances are, Forever 21 can’t settle its way out of this one.