Home News Latest Blog from BMS: Will Labor Compliance Wreck Clothing Manufacturers

Latest Blog from BMS: Will Labor Compliance Wreck Clothing Manufacturers

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In recent years, many companies that do business in the fashion, footwear and garment industry have seen an increase in the enforcement of federal work eligibility regulations. Several high-profile cases have brought the issue to the forefront. For example, a 17-month federal investigation forced American Apparel to fire about a quarter of its workforce in Los Angeles due to “irregularities in the identity documents the workers presented when they were hired.”

Since 2003, the ICE (U.S. Immigration and Customs Enforcement Agency) has been busy seeking out and deporting illegal immigrants. But, under the Obama administration, they have shifted focus to employer responsibility. This means that tracking eligibility verification and documentation is now more important than ever for manufacturers in the US. And the consequences of noncompliance can be severe. According to Kevin W. Smith, a partner at Crowe Horwath LLP, judicial fines and fines for final orders, forfeitures and restitutions came to a total of $43,567,346 in 2010 alone. One company, fashion retailer Abercrombie & Fitch, was fined $1 million for a technologically deficient I-9 record-keeping system.

Obviously, dealing with immigration and labor compliance issues is serious business, and the ICE is getting serious about enforcement. The agency uses confidential informants and electronic surveillance, and may also visit the worksite or the homes of employees to determine if there has been any criminal wrongdoing during the hiring process. They also work alongside other government agencies like the U.S. Department of Labor Wage and Hour Division, the Social Security Administration, the IRS, and the FBI to detect and prosecute I-9 violations.

Mr. Smith, writing online at the SmartBusiness blog, advises manufacturers and retailers to take a close look at their operation and devise a system to prevent any kind of labor law or worker eligibility violations. He suggests the following course of action:

  • Conduct a self-audit of your I-9 forms.
  • Keep I-9 forms separate from employee personnel files. Also, separate present and past employee forms.
  • Do not accept expired forms from new hires when completing the I-9 form.
  • Re-verify any expiring work authorization documents before they expire. Do not allow employees to work if they have expired documents.
  • Only accept documents from new hires that are on the List of Acceptable Documents and appear to be genuine.
  • If ICE shows up to conduct an audit, ask for a Notice of Inspection and know that you have three business days before you have to turn over your original I-9 forms.www.sbonline.com

 

Once again, government regulations create the need for a complex data tracking system. If your business wants to steer clear of heavy fines and possible criminal sanctions, it will have to manage its vital data with clarity and visibility.  

With the ICE’s renewed focus on employer compliance, it is likely that even companies with no immigrant workers on the payroll will be asked, at some point, to prove their adherence to verification requirements. This is where a sophisticated and accurate Supply Chain Management tool comes in handy. With the right SCM or ERP system in place you can oversee and track all of the essential data points needed to prove labor law compliance.

By JW Yates
New York City
New York

Ben Hanson Ben Hanson is one of WhichPLM’s top contributors. Ben has worked for magazines, newspapers, local government agencies, multi-million pound conservation projects, museums and creative publications before his eventual migration to the Retail, Footwear and Apparel industry.Having previously served as WhichPLM’s Editor, Ben knows the WhichPLM style, and has been responsible for many of our on-the-ground reports and interviews over the last few years. With a background in literature, marketing and communications, Ben has more than a decade’s worth of experience, and is now viewed as one of the industry’s best-known writers.