Garment Piece-Rate Ban and Brand Wage Liability Under SB 62

A clothing label found in a sewing shop can be enough to bring an apparel brand into a garment worker’s wage claim in California, even if the brand never employed the worker. Senate Bill 62 banned piece-rate pay for garment manufacturing work and made brand guarantors jointly liable with their contractors for unpaid wages. Claims run through a fast Labor Commissioner process that presumes the worker’s numbers are right, so a brand’s defense depends on the records it can produce.

What does the piece-rate ban require?

Hourly pay for garment work. Labor Code section 2673.2(a) says an employee “engaged in the performance of garment manufacturing shall not be paid by the piece or unit, or by the piece rate,” and must be “paid at an hourly rate not less than the applicable minimum wage.” The section was added by SB 62 (Stats. 2021, ch. 329) and took effect January 1, 2022.

Two exceptions matter. Subdivision (b) says the ban doesn’t prohibit “incentive-based bonuses,” so a production bonus paid on top of an hourly wage can be lawful. Subdivision (c) exempts workplaces covered by a bona fide collective bargaining agreement that meets several conditions, including a regular hourly rate “of not less than 30 percent more than the state minimum wage.”

The exposure for a violation is its own line item. Under subdivision (d), a garment manufacturer or contractor that pays by the piece faces “compensatory damages of two hundred dollars ($200) per employee for each pay period in which each employee is paid by the piece rate,” on top of, and separate from, any other damages or penalties in the code. By its terms, that subdivision names garment manufacturers and contractors, not brand guarantors.

Who counts as a brand guarantor?

Any company that contracts for garment work, even through layers. Section 2671(d) defines a brand guarantor as “any person contracting for the performance of garment manufacturing, regardless of whether the person with whom they contract performs the manufacturing operations or hires contractors or subcontractors to perform the manufacturing operations.” The same subdivision adds that contracts for garment manufacturing “include licensing of a brand or name.”

That definition reaches retailers with private labels, apparel brands that use a full-package vendor, and licensors whose names go on the clothes. The operations listed include affixing a label, so a company whose only step is putting its tag on finished goods isn’t outside the statute for that reason.

What is a brand guarantor liable for?

Unpaid wages and related amounts, jointly with the contractor. Section 2673.1(a)(1) says a garment manufacturer, contractor, or brand guarantor that contracts for garment operations “shall be jointly and severally liable” for “The full amount of unpaid minimum, regular, overtime, and other premium wages, reimbursement for expenses, and any other compensation, including interest,” the employee’s fees and costs under subdivision (e), and civil penalties for failure to secure workers’ compensation coverage.

The damages and penalties provision is narrower. Subdivision (b) makes “garment manufacturers and contractors” liable for “the full amount of damages and penalties,” including liquidated damages, and limits each one to a proportionate share when two or more work at the same worksite during the same payroll period. A brand guarantor’s exposure under the section is built around subdivision (a), and keeping the assessment inside those limits is part of the defense.

There’s also a protection worth knowing. Under subdivision (k), paying wages under the section “shall not be used as a basis for finding that the brand guarantor or registered garment manufacturer making the payment is a joint employer, coemployer, or single employer” of a contractor’s employees.

Liability to the worker doesn’t end the brand’s options. Section 2673.1(a)(2) says parties held jointly and severally liable after a final judgment may still enforce “any lawful or equitable remedies,” including “a right of contribution and indemnity against each other for liability created by acts of the other.” A vendor agreement with a clear indemnity clause, backed by insurance the contractor actually carries, is what gives that right value when a sewing shop closes and leaves the brand holding the assessment.

How does a garment wage claim proceed?

Quickly, and before the Labor Commissioner. Under section 2673.1(c), employees enforce the section “solely by filing a claim with the Labor Commissioner.” Subdivision (d) sets short, fixed timelines for notice, a subpoena for records, a meet-and-confer conference with the commissioner’s assessment, and a hearing.

The presumptions favor the worker. If the employee provides labels or other credible information identifying a brand guarantor, subdivision (d)(3) creates “a presumption that the brand guarantor or garment manufacturer is liable with the contractor.” The employee’s claimed hours and amounts are “presumed valid” unless the respondent provides “specific, compelling, and reliable written evidence to the contrary,” including contemporaneous payroll records and a purchase order or invoice identifying who the work was for. A written declaration alone “is not sufficient to rebut the presumption.”

Losing has a price beyond the award. Under subdivision (f), a contractor, manufacturer, or brand guarantor that seeks judicial review must post a bond “in an amount equal to one and one-half times the amount of the award.” A party that refuses to pay the assessment and then loses the hearing pays the employee’s fees under subdivision (e).

The commissioner doesn’t need a worker’s claim to start. Under subdivision (i), it may investigate on its own and, after notice to the brand, findings, a conference with the parties, and a hearing, bring a civil action to enforce joint and several liability, and subdivision (m) adds stop orders and citations to its tools.

What should a brand or manufacturer do after a garment wage claim?

1. Preserve every purchase order, invoice, style or cut sheet, and contract with the contractor and any subcontractor, along with emails about pricing and delivery, under a litigation hold.
2. Calendar the dates in the Labor Commissioner’s notice, including the records subpoena, and check the vendor agreement’s indemnity and insurance terms and the company’s EPLI policy for notice requirements.
3. Identify who placed the orders and who dealt with the contractor, and confirm whether the styles the worker names were made for the company and during which weeks.
4. Pull the records the statute requires under section 2673(b), such as contract worksheets showing the agreed price per unit and copies of each contractor’s garment license.
5. Talk to a lawyer before the meet-and-confer conference, before paying or refusing to pay an assessment, and before contacting the contractor’s workers.

The firm’s page on garment industry wage claim defense for brands and manufacturers describes its approach to these claims. A separate statute on underfunded contracts with garment and other labor contractors is covered in the post on labor contractor liability under Labor Code 2810.

Garment wage claim questions from California brands

Can a brand be liable if its vendor hid the subcontractor?

Yes. The definition of brand guarantor in section 2671(d) applies whether the contracted party does the work itself or “hires contractors or subcontractors to perform the manufacturing operations.” A brand that buys from a full-package vendor may still face a claim from workers at a shop it never heard of. Vendor agreements that require disclosure of every subcontractor, with audit rights, reduce that surprise.

Are production bonuses still allowed?

Yes, if the base pay is hourly. Section 2673.2(b) says the ban doesn’t prohibit “incentive-based bonuses.” A bonus that’s really a disguised piece rate, such as an hourly wage set below minimum and topped up by units sewn, invites a claim. Bonus plans should be written so the hourly rate meets minimum wage on its own.

Can workers sue the brand directly in court?

Generally not first. Section 2673.1(c) says employees enforce that section “solely” through a Labor Commissioner claim, and subdivision (j) says the section doesn’t create a new civil action except as it provides. Subdivision (h) allows a civil action under other laws if the commissioner misses the statutory deadline for its findings, unless a brand or manufacturer files a writ petition in time. Workers can still pursue other rights under state or federal law.

What records does a brand have to keep?

Section 2673(b) requires brand guarantors to keep records “for four years,” including contract worksheets with the agreed price per unit, contracts and purchase orders, and copies of each contractor’s garment license. Those documents double as the evidence that can rebut a worker’s claim, so a missing file costs the brand twice.

If your company has been named in a garment worker’s wage claim

If your brand or manufacturing business has received notice of a garment worker’s claim with the Labor Commissioner, the purchase orders and contractor records usually decide how much of the assessment can reach the company. Rosenberger + Kawabata represents employers defending employment lawsuits and claims through its business litigation practice, including claims involving garment industry wage liability. Contact Rosenberger + Kawabata online for a confidential consultation, or call (310) 894-6921.

Sources

The statutes are Labor Code sections 2671, 2673, 2673.1, and 2673.2. Section 2673.2 was added by Senate Bill 62 (Stats. 2021, ch. 329), and section 2673.1 was last amended by Assembly Bill 156 (Stats. 2022, ch. 569).

This post is general information about California and federal employment law as of November 7, 2026. It is not legal advice, and reading it does not create an attorney-client relationship. Employment statutes, regulations, and court decisions change often, and the outcome of any claim depends on its facts. Past results do not guarantee future outcomes.