A recent report by the U.S. Department of Labor has exposed wage theft and illicit pay practices in the heart of Southern California, where laborers toiling away for some of America's top fashion retailers are taking home a meagre $1.58 an hour.

The investigation covered 50 garment contractors across Los Angeles, Orange, and San Bernardino counties between July 31, 2021, and June 30, 2022, and revealed that 80% of the contractors violated wage laws, owing over $892,000 in back pay and liquidated damages to 296 workers. More than half of the employers were found to have paid garment laborers partly or wholly off the books, and payroll records were either doctored or missing.

The investigation also discovered that 32% of the contractors paid workers on a piece-rate basis, a practice that California outlawed in 2022. Shockingly, one Nordstrom and Stitch Fix contractor was found paying workers only $1.58 an hour. The majority of these underpaid garment workers, who are primarily immigrants, are too afraid to speak up, fearing backlash or termination.

LA's Fashion District employs about 20,000 garment workers, constituting roughly 83% of California's and the nation's cut-and-sew apparel sales. The report found that the sewing fees manufacturers paid to contractors were, on average, $2.75 below the amount needed for contractors to meet federal wage standards. Contractors who played by the rules received a higher sewing fee, ranging from $17.50 to $35 per garment.

The Garment Worker Center, an anti-sweatshop organization based in the Fashion District, believes that over time and with robust enforcement, legislation will drive change in the industry.