California Governor Gavin Newsom signed a bill into law on Monday that will have direct implications for garment workers, and could also upend the economics of the fashion supply chain. Senate Bill 62 requires apparel factories to pay workers an hourly rate instead of per-piece produced; it will also hold brands and retailers liable for wage theft in their supply chains in California, including when third-party contractors are involved.
“It is completely groundbreaking. That onus of responsibility is a very hard thing to win, which is why it’s an incredible success,” says Thulsi Narayanasamy, head of labour rights at the Business & Human Rights Resource Centre, based in London. “This is the first step we’ve really seen in a piece of legislation that shifts the business model. It puts the onus on [brands] to ensure they are paying their suppliers. That simply isn’t something that we’ve ever seen anywhere else.”
SB 62 will impact any brand that produces clothing in California, although a number of brands that supported the bill say it won’t change anything for them in practice because they’re already paying higher wages and either own, or do not object to taking responsibility for, their factories. California companies Reformation, Bomme Studio, Boyish Jeans, Christy Dawn, Nona Atelier and denim manufacturer Saitex, as well as brands based elsewhere such as Eileen Fisher and Mara Hoffman, had all expressed support for the bill. The effects are more likely to be felt by larger brands that are more frequently associated with wage violations, according to the Garment Worker Center’s research.
Advocates hope the bill’s passage will turn the tide for the regulatory landscape around the world. Pressure is mounting on global policymakers to issue regulations that clean up corporate supply chains, on both the social and environmental fronts, in ways that voluntary efforts have not been able to. Some governments are responding with other measures, such as efforts in the European Union and UK to enact due diligence legislation, but the California bill stands apart in the legal accountability it establishes for brands over what happens in their supply chains, even in factories they don’t directly own.
The closest another piece of legislation has gotten to SB 62, according to Narayanasamy, is a due diligence law that Germany passed in July and will go into effect in 2023. It requires companies with 3,000 or more employees in Germany to take “appropriate measures” to ensure human rights and environmental protections in their supply chains, and the EU has a potentially similar effort underway, with an expected proposal for what its due diligence legislation would look like by the end of the year. However, the German law does not establish brand liability for violations in their supply chains, and it’s unclear whether the EU’s will or not.
“The real concern that civil society groups have is [whether the due diligence law] is going to be legislation that actually holds companies liable for when workers’ rights are curtailed?” says Narayanasamy. “The greatest impact that this bill passing in California will have — and we certainly intend to use it to spark the debate [in the UK] — is to say that it is definitely possible to have liability clauses included in legislation that protects workers’ rights. And on top of that, that brands themselves can be in support of that.”
Calls for brand liability have been growing in Asia. For example, the Asia Floor Wage Alliance published a legal strategy in July for holding global brands liable for labour rights violations in their supply chains. “Lawmakers, on a nation-state level, can look to the US now and say, ‘Okay, there is a legal precedent here that can be applied,’” says Elizabeth Cline, advocacy and policy director at the nonprofit Remake, which campaigned for SB 62.
The California Chamber of Commerce, which opposed the bill, told Vogue Business earlier this month that the liability provision puts an unfair burden on brands. “I don't think there's an appreciation really for the legal liability risk that will be placed on companies,” said Ashley Hoffman, the group’s policy advocate. Asked for comment after the bill’s passage, the Chamber said only, “We are disappointed the bill was signed into law.”
The liability component of the bill provides a mechanism for enforcement (what enforcement will look like will vary from case to case, but the bill gives the labour commissioner the authority to issue a citation or order to stop production), which voluntary brand efforts have lacked — and is why advocates say such efforts have not been more effective at improving labour and environmental practices. “That fashion brands are responsible to their garment makers in the eyes of the law in [California], the world's fifth largest economy, is historic, to say the least,” says Cline. “Every bill like this has incredible soft influence as well, as it indicates to politicians what the public cares about and it strengthens other human rights endeavors whether they’re related to fashion or not.”
Garment Worker Center director Marissa Nuncio, who helped lead the campaign for SB 62, says the bill’s passage on Monday spurred momentum elsewhere overnight. “We’ve already started hearing our allies discuss the implications that SB 62 could have for advocates in other states and even other countries,” she says. “SB 62 has made California a leader and a model for the industry, and we’re looking forward to seeing similar protections get enacted across the country and the world.”
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