Department of Labor recovers $1.1M for 165 garment workers after sewing contractors withheld overtime wages, falsified records

LOS ANGELES – The U.S. Department of Labor today announced an investigation recovered more than $1 million in back wages and damages — its largest settlement to date for California garment workers — for 165 workers after finding a Los Angeles garment contractor denied them overtime wages illegally and then tried to conceal the wage theft. 

The investigations found four Los Angeles sewing contractors in violation: Good Cash LLC and its associated entities, Good Cash Inc., Premium Quality Apparel LLC, and Premium Quality Apparel Inc. Good Cash and Premium Quality Apparel are owned by Ramon Tecum; Marisela Romero, also known as Diana Tecum; and Joseph Delao. Investigators also determined former California Deputy Labor Commissioner Conrado Gomez played a significant role in the businesses. 

Investigators from the department’s Wage and Hour Division discovered the contractors willfully failed to pay overtime wages for hours over 40 in a workweek to employees who worked an average of 52 hours per week. The division also learned the contractors falsified payroll records and issued fake checks to mask their illegal pay practices. When the department executed a court-authorized investigative inspection warrant, Tecum, Romero and Gomez attempted to interfere by pretending to be workers, shutting off the power to the facility, and ordering employees to leave the worksite. 

During the investigation, the department enforced a hot goods hold on the apparel produced by the contractors’ employees for I Am Beyond LLC, doing business as the Beyond Yoga apparel brand. Federal law prevents interstate shipment of “hot goods” produced in violation of minimum wage, overtime, or child labor regulations and applies to the employer and anyone in possession of the goods.

When informed of its contractors’ violations, Beyond Yoga agreed to make good on its contractors’ legal obligations and pay $582,317 in back wages and an equal amount in damages. To improve compliance in their product supply chain, Beyond Yoga entered into an enhanced compliance agreement with the division, which includes updating its code of conduct for garment contractors. The agreement requires full compliance with the Fair Labor Standards Act, establishes a monitoring program and directs all contractors to display information for workers on how to file complaints of potential labor violations confidentially, including through Beyond Yoga’s worker hotline.

“Garment workers are often subject to stringent production requirements and receive some of the lowest wages in the country,” said Wage and Hour Administrator Jessica Looman. “The garment industry employment model involves multiple layers of contractors and sub-contractors and leaves workers vulnerable to wage theft and exploitation. This case demonstrates that the Wage and Hour Division will hold to account employers across the supply chain to ensure that workers receive the pay they have earned and the rights they are afforded by the law.” 

The Office of the Solicitor obtained a consent judgment in the U.S. District Court for the Central District of California against the Good Cash and Premium Apparel entities and its owners. The judgment requires Good Cash and Premium Quality Apparel to pay $200,000 in civil money penalties for its willful Fair Labor Standards Act violations. In 2021, the division cited Good Cash for similar violations and recovered $29,413 in back wages for nine workers and assessed $3,921 in penalties in a separate investigation.

Federal law prohibits retaliation, harassment, intimidation or adverse actions against employees who assert their workplace rights. An employer cannot retaliate, harass or intimidate workers for exercising their rights or for receiving wages they are owed as a result of the department’s investigation. 

“Employers who steal hard-earned wages from workers who produce their goods may incur penalties that disrupt the operations of their distributors and cause production to fall short of customers’ expectations, as the enforcement of the hot goods provision in this case shows,” explained Solicitor of Labor Seema Nanda. “To avoid potential liability, businesses must monitor their supply chains closely to make sure the goods they purchase are made legally.”

A 2022 Wage and Hour Division survey of 50 Southern California garment-sewing contractors and manufacturers found violations in 80 percent of cases, leading to the recovery of more than $892,000 in back wages and liquidated damages for 296 workers.  

Read more about the division’s efforts in the garment industry. 

Workers can call the Wage and Hour Division confidentially with questions, regardless of where they are from, and the department can speak with callers in more than 200 languages. Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division.