O.C. Garment Factory Penalized for Unpaid Wages
After an investigation by federal labor officials, a U.S. District Court judge ordered an apparel manufacturer to pay $887,554 to 115 workers.
In a default judgment signed on Nov. 30, U.S. District Court Judge A. Howard Matz in Orange County, Calif., ruled in favor of the U.S. Department of Labor, which had been investigating Laundry Room Clothing Inc. and its owners, Milton and Sharon Kaneda, for failing to pay $380,824 in unpaid minimum wages and overtime compensation. The default judgment also awarded the workers $506,730 in liquidated damages.
“Low-wage workers, such as those employed at garment shops throughout Southern California, are particularly vulnerable,” U.S. Secretary of Labor Hilda Solis said in a statement. “The Department of Labor will not hesitate to hold employers accountable for paying their employees the wages they have earned.”
Laundry Room Clothing, which, the Labor Department said, made clothing at one time for Forever 21 and Ross Stores Inc., is no longer in operation, according to an attorney who was representing them. Its factor, Hana Financial, foreclosed on the company about four months ago for not repaying a loan, the attorney said.
The Kanedas used to own two juniorswear labels, Scrapbook and Crafty Couture, but sold them a few years ago to Los Angeles–based Panglobal Brands Inc., whose other labels include SoSik, Tea & Honey and Haven.
The Kanedas then started doing private-label manufacturing a few years ago.
A series of investigations by the Labor Department determined that Laundry Room and the Kanedas had missed several payrolls.
In April, the U.S. District Court granted the department’s request to monitor the business’s payrolls to make sure employees were paid on time. The Labor Department said that from April, workers were paid on time but that they still were not paid wages for payrolls missed between Feb. 7, 2009, and March 31, 2010.
At the time of the federal monitoring, a representative for Laundry Room Clothing, Jesse Atilano of Labor Law Inc., said the Kanedas had paid $81,500 in back wages and taxes owed the employees, who worked from Feb. 16 to March 31, 2010.
The Fair Labor Standards Act requires that covered employees be paid at least the federal minimum wage of $7.25 an hour for all hours worked, plus time and a half for hours worked beyond 40 hours a week. In California, the minimum wage is $8 an hour. Employers must also maintain accurate time and payroll records.—Deborah Belgum
