A San Diego silk screening contractor that produces merchandise for high-profile celebrities failed to pay overtime wages for 76 workers and agreed to pay an equal amount of $269,914 in liquidated damages.
The U.S. Department of Labor announced Monday that King Graphics agreed to pay the affected workers as a part of a consent judgment reached last month in deferral court. The company also paid $10,473 to lift the “hot goods hold”, imposed as a direct result of violating the Fair Labor Standards Act (FLSA).
The hold prevented a truckload of Britney Spears T-shirts from being shipped to Target stores, while other items were withheld from shipment to retailers such as Aeropostale, Footlocker, Hot Topic, Kohl's, PacSun, Target, and Urban Outfitters.
The court also ordered the employer to hire an independent third party to monitor FLSA compliance, which requires a rate of pay for all hours worked over 40 in a workweek.
“Celebrities, retailers, and manufacturers profit from T-shirts sold for $40 or more, while the low-wage workers who produce the merchandise work overtime to meet consumer demand and become victims of wage theft,” said the Acting Administrator of the Wage and Hour Division Jessica Looman. “The Wage and Hour Division will continue to hold employers accountable and use every available tool to ensure that workers are paid in compliance with the law.”
The investigation also looked at manufacturers who violated the FLSA for receiving and distributing hot goods, according to the Department of Labor. All parties involved have cooperated with the investigation and agreed to comply.
“A manufacturer or retailer must ensure their supply chain is free of ‘hot goods’ – products produced by workers whose legal rights have been violated – or risk legal liability,” added Looman. “All parties, from the entertainers to the distributors and wholesalers, should ensure their profits aren’t supported by workers in sweatshops, many of whom are immigrant women supporting families.”