Governor Newsom’s First Budget Includes Millions for Historically Insolvent Restitution Fund
Los Angeles, CA – Garment workers are the backbone of L.A.’s manufacturing sector. They contribute to the profitability of California’s massive retail industry, but tens of thousands of garment workers are routinely underpaid—or not paid at all—for work performed. Most never recoup those stolen wages: more than four in five workers who win their wage theft cases never end up seeing a dime due to factories shutting down. Tragically, a fund established by the State of California to be the payor of last resort, to ensure these workers can recoup their wages even if their employers won’t pay, has been nearly bankrupt for years, leaving hundreds of workers waiting for millions of dollars in wages they have already proven they are owed.
Today, Governor Newsom signed a budget that passed in the Assembly and Senate on Thursday, and includes millions of dollars to eliminate the years-long waitlist. The Garment Worker Center, Bet Tzedek, and the UCLA Labor Center made the budget request on behalf of the garment workers, with assistance from the Western Center on Law & Poverty.
“I won my wage theft case one and a half years ago, and I will finally be able to get the money I am owed. With this money, my husband and I plan to open a small coffee shop in order to save up for an affordable apartment with enough space for the kids,” said Yeni Dewi, a Garment Worker Center member.
“Our garment worker members are thrilled that California is finally keeping its promise to them,” said Marissa Nuncio, Executive Director of the Garment Worker Center. “This budget action will ensure that hundreds of garment workers will each receive thousands or tens of thousands of dollars in stolen wages, which they have been waiting for years to be paid. The impact on the lives of these workers, their families, and our communities will be enormous.”
Wage theft runs rampant across L.A.’s low-wage industries: a UCLA Labor Center study found that Angelenos lose $26.2 million dollars a week in unpaid wages. The garment industry is one of the worst wage theft offenders. Garment workers in Los Angeles, most of whom are immigrant women, regularly work more than 12 hours per day and 60 to 70 hours per week while receiving only $3 to $4 per hour—far below California’s $12 minimum wage—with no overtime pay. When found guilty of wage theft, however, many of the smaller garment factories simply close their doors, declare bankruptcy, or otherwise skip out on paying their workers.
The Garment Restitution Fund was created by the California legislature 20 years ago to ensure that garment industry workers whose wages were stolen are made whole. The money for the fund typically comes from the annual registration or renewal fees that garment industry employers are required to pay to do business in the state. Similar funds exist for farm and car wash workers because, as with the garment industry, the state has determined that egregious industry conditions and vulnerabilities for the workers warrant this type of payor of last resort.
Unfortunately, these registration and renewal fees have remained frozen in place for the past 20 years, while the minimum wage and worker claims have risen steadily, meaning the revenues flowing into the fund have not kept up with the demands on the fund. As a result, workers who have already proven what they are owed are on a waiting list of 5 to 20 years to be compensated for thousands of dollars in stolen wages. Because of the 2019-2020 budget item, all of the workers currently on the waitlist will hopefully be paid within the next few months.
“We are grateful to the brave workers who made their voices heard in Sacramento, and to legislators like Senator Holly Mitchell and Senator Maria Elena Durazo who championed justice for the workers,” said Matt DeCarolis, a staff attorney at Bet Tzedek who has represented garment workers in wage claims for more than a decade. “We are looking forward to working with Governor Newsom and his team to ensure the budget item is implemented, and to collaborating with lawmakers to fix the structural problems with the fund, so we never put workers in this position again because justice delayed is justice denied.”
Los Angeles County Supervisor Hilda Solis and Los Angeles Mayor Eric Garcetti also supported the budget request.
The Garment Worker Center (GWC) is a worker rights organization whose mission is to organize low-wage garment workers in Los Angeles in the fight for social and economic justice. www.garmentworkercenter.org
Bet Tzedek is a non-profit law firm committed to providing free, comprehensive legal assistance and representation, volunteer and court-based self-help services, and legal education to the most vulnerable low-income Angelenos.
The UCLA Labor Center brings together advocates, workers, students, academics, and policymakers to address the most critical issues facing working people today through research, education, leadership programs, and policy work that lifts industry standards. The UCLA Labor Center is housed at the Institute for Research on Labor and Employment, a multidisciplinary research center dedicated to the study and teaching of labor and employment issues at UCLA. https://www.labor.ucla.edu/
Supporters include: Western Center on Law & Poverty, California Labor Federation, Los Angeles County Federation of Labor, Coalition for Humane Immigrant Rights, Asian Americans Advancing Justice – Los Angeles, Asian Americans Advancing Justice – Asian Law Caucus, Workers United, Worksafe, Food Chain Workers Alliance, National Employment Law Project, National Day Laborer Organizing Network, & Wage Justice Center, among others.