[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5502 Introduced in House (IH)]

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118th CONGRESS
  1st Session
                                H. R. 5502

  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 HOUSE OF REPRESENTATIVES

                           September 14, 2023

Mr. Nadler (for himself, Ms. Tlaib, Ms. Lee of California, Ms. Norton, 
 Ms. Velazquez, and Ms. Ross) introduced the following bill; which was 
        referred to the Committee on Education and the Workforce

_______________________________________________________________________

                                 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 his 
                        or her self 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, dying, 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) Pro rated 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 contractor enters into the 
                        contract for such operations; and
                            (ii) annually thereafter on a date 
                        determined by the Secretary.
    (e) Certificates.--
            (1) In general.--The Secretary shall issue a certificate of 
        registration to each garment manufacturer or garment contractor 
        that submits a registration meeting the requirements under this 
        section.
            (2) Applicability.--
                    (A) In general.--Except as provided in subparagraph 
                (B), each certificate issued under paragraph (1) shall 
                be effective for a period of 12 months.
                    (B) New manufacturers or contractors.--A 
                certificate with respect to a registration submitted 
                under subsection (d)(2)(B)(i) shall be effective until 
                the following registration date as determined by the 
                Secretary.
            (3) Posting.--Each garment manufacturer or garment 
        contractor receiving a certificate under paragraph (1) shall 
        post such certificate in a place where it may be read by any 
        employee of the manufacturer or contractor during the workday.
            (4) Suspension or revocation.--The Secretary may suspend or 
        revoke a certificate of registration issued under paragraph (1) 
        if the garment manufacturer or garment contractor that 
        submitted the registration--
                    (A) has knowingly made any misrepresentation in the 
                application for such certificate; or
                    (B) has failed to comply with this Act or any 
                regulation under this Act.
    (f) Recordkeeping.--The Secretary shall, through regulations, 
establish requirements for recordkeeping for all garment manufacturers 
and garment contractors engaging in the garment industry in order to 
assist in enforcing the requirements of this section.
    (g) Enforcement.--
            (1) In general.--The Secretary may impose a civil money 
        penalty of not more than $50,000,000 against any person who 
        violates a requirement under this section.
            (2) Considerations.--In assessing the amount of a penalty 
        under this subsection, the Secretary shall give consideration 
        to--
                    (A) the size of the business of the person;
                    (B) whether the violation of the person was 
                committed in good faith;
                    (C) the gravity of the violation;
                    (D) the history of any previous violations of the 
                person under this section; and
                    (E) the history of the person in complying with the 
                recordkeeping requirements under subsection (f).
    (h) Regulations.--The Secretary may prescribe such regulations or 
other guidance as may be necessary to carry out this section.

SEC. 4. UNDERSECRETARY OF THE GARMENT INDUSTRY.

    (a) In General.--There is established in the Department of Labor 
the Office of the Garment Industry (referred to in this section as the 
``Office'').
    (b) Undersecretary.--
            (1) In general.--The Secretary of Labor shall appoint an 
        Undersecretary of the Garment Industry (referred to in this 
        section as the ``Undersecretary'') to head the Office.
            (2) Functions.--The Undersecretary shall--
                    (A) carry out section 3 using sums appropriated 
                under subsection (c);
                    (B) carry out the national domestic garment 
                manufacturing support program under section 5; and
                    (C) provide assistance to the Administrator of the 
                Wage and Hour Division in enforcing section 8 of the 
                Fair Labor Standards Act of 1938 (29 U.S.C. 208).
    (c) Authorization of Appropriations.--
            (1) In general.--There are authorized to be appropriated to 
        the Secretary of the Labor--
                    (A) $10,000,000 for fiscal year 2022, to establish 
                the Office and carry out the functions described in 
                subparagraphs (A) and (C) of subsection (b)(2); and
                    (B) $3,000,000 for each of fiscal years 2023 
                through 2027, to carry out the functions described in 
                subparagraphs (A) and (C) of subsection (b)(2).
            (2) Availability.--Any sums appropriated under the 
        authorization contained in this subsection shall remain 
        available, without fiscal year limitation, until expended.

SEC. 5. NATIONAL DOMESTIC GARMENT MANUFACTURING SUPPORT PROGRAM.

    (a) Definitions.--In this section:
            (1) Eligible entity.--The term ``eligible entity'' means an 
        entity that is--
                    (A) a garment manufacturer that is incorporated in 
                and performs garment manufacturing within the United 
                States; or
                    (B) a nonprofit organization that provides 
                workforce development opportunities with respect to the 
                garment industry.
            (2) Garment industry; garment manufacturer; garment 
        manufacturing.--The terms ``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) Secretary.--The term ``Secretary'' means the Secretary 
        of Labor, acting through the Undersecretary of the Garment 
        Industry appointed under section 4(b).
    (b) In General.--From amounts made available under subsections 
(f)(2) and (h), the Secretary shall award grants, on a competitive 
basis, to eligible entities to support garment manufacturing in the 
United States.
    (c) Application.--An eligible entity seeking a grant under this 
section shall submit to the Secretary an application at such time, in 
such manner, and containing such information as the Secretary may 
require, including--
            (1) a description of the project that the eligible entity 
        proposes to carry out using such grant; and
            (2) an implementation plan of such project that reflects 
        the expected participation of, and partnership with, applicable 
        labor organizations and relevant community stakeholders.
    (d) Award.--
            (1) Selection.--In awarding grants under this section to 
        eligible entities, the Secretary shall give priority to 
        eligible entities--
                    (A) with a workforce that is covered by a 
                collective bargaining agreement;
                    (B) that are certified by a State in which such 
                eligible entity operates as a minority-owned 
                businesses, women-owned businesses, or veteran-owned 
                businesses; or
                    (C) who have operated as a garment manufacturer 
                within the United States for more than 5 years.
            (2) Amount.--The amount of a grant awarded under this 
        section may not be more than $5,000,000.
    (e) Use of Funds.--An eligible entity receiving a grant under this 
section shall use the grant funds to support--
            (1) investments in training and workforce development for 
        employees within the garment industry;
            (2) the acquisition of relevant tools and equipment for 
        garment manufacturing in the United States;
            (3) the acquisition of, and capital improvements to, 
        facilities for garment manufacturing in the United States and 
        to promote the health and safety of employees in such 
        facilities; or
            (4) efforts to assist in educating employees about rights 
        under this Act and other relevant Federal, State, or local 
        laws.
    (f) Return of Funds.--
            (1) In general.--An eligible entity receiving a grant under 
        this section shall return any unused amount of such grant (in 
        part or in full, as required by the Secretary) if the Secretary 
        determines the eligible entity violated any provision of this 
        Act, including any amendment made by this Act.
            (2) Use of returned funds.--Amounts returned under 
        paragraph (1) shall be made available for grant awards under 
        subsection (b).
    (g) Report.--Not later than 6 months after the date on which an 
eligible entity receives a grant under this section, the eligible 
entity shall submit to the Secretary a report that includes an account 
of the use of grant funds awarded under this section.
    (h) Authorization of Appropriations.--There is authorized to be 
appropriated $50,000,000 to carry out this section.
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