The Difficulties of Labor Monitoring

The issue of monitoring employers--especially subcontractors--for labor standards violations has long been a vexing one (just ask Kathie Lee Gifford).  So, the following story from the AP should come as no surprise:

Like other garment factories in New York, Jin Shun Inc. was a small enterprise on the city's margins, staffed by Chinese-speaking immigrants and tucked away in an industrial corner that few outsiders see. There were still plenty of eyes on the factory: government regulators and monitors hired by big-name retailers to look for labor violations. Yet state labor officials who raided the shop in July said all those people who had been watching missed something — that its owners had shortchanged workers of $3 million in wages since 2005.

Monitoring programs created in the 1990s to counteract the public's outrage over sweatshops led to a new breed of scofflaws — schemers who learned to deceive their monitors in a more sophisticated fashion. "There is an increase in contractors devising schemes to hide the violations," said New York Labor Commissioner M. Patricia Smith. "It shows the need for really aggressive enforcement." . . .

Investigators said the New York factory, Jin Shun Inc., had schemed to deceive its many monitors, which included inspectors hired by several big-name clothing retailers that relied on the plant for production. Among the allegations by authorities: Employees put in up to 70 hours a week while punching multiple timecards to hide their overtime. The company repeatedly changed names to avoid investigation. Workers, mostly Chinese-speaking immigrants, were even given cheat sheets, telling them how to answer questions from labor inspectors. The cheat sheets, in Chinese, instructed workers to say they couldn't remember the details of their schedules, but always made at least $7.75 per hour. . . .

Labor experts said the case illustrates the limitations of public and private programs put in place to monitor garment factories for labor abuses. San Diego State University professor Jill Louise Esbenshade, who studied the garment industry in Southern California, said infractions are still rampant. One California survey found that more than half of the shops in monitoring programs were out of compliance with labor law. Part of the problem, she said, was that employees had little incentive to reveal violations.

As Commissioner Smith emphasized, this issue shows the need for strong government inspections and enforcement.  No system is ever perfect, but what New York has been doing is clearly more effective than the federal DOL.

Hat Tip:  Dennis Walsh

-JH