California Cites Garment Contractors $570K, Some Lacked Workers’ Comp

September 17, 2018

The California Labor Commissioner’s Office has cited six Los Angeles area garment contractors $573,704 for labor law violations after uncovering a scheme where the contractors illegally operated under one license to avoid compliance.

Four of the contractors did not have valid workers’ compensation coverage for their employees.

“Shared use of a garment manufacturing registration is illegal, and it gave these contractors an unjust economic advantage over law-abiding garment businesses,” Labor Commissioner Julie A. Su said in a statement.

The Labor Commissioner’s office discovered that most of the 57 employees at the contractors’ building downtown on South Broadway worked up to 65 hours a week for less than minimum wage. Two workers, ages 15 and 16, were operating industrial sewing machines in violation of California’s child labor laws.

Investigators visited the worksite, operating under the name Pure Cotton Inc. Owner Kyung Ho Choi told investigators he collected rent but was not involved in the making of garments.

His brother-in-law, Kuong Chan Kim, claimed that all of the workers were employed by his company, Union Supply Inc., which was registered as a garment manufacturer.

Further investigation revealed four other garment manufacturing contractors were operating in the building without garment licenses or workers’ comp. Kim charged each contractor a fee for the use of his license and insurance coverage, which allegedly concealed the actual number of workers.

The Labor Commissioner’s office issued stop work orders to the four contractors operating under the Union Supply Inc. license, their inventory was confiscated and they were cited for violating wage statement and garment registration provisions, and failure to cover employees with workers’ comp.

  • Cindy Soon Yun, 20 employees, was cited $118,600. She was also cited for violating child labor laws
  • Sun Park, 10 employees, $158,855
  • Pil Chang, eight employees, $37,450
  • Francisco Tecum Son, four employees, $18,000
  • Union Supply Inc., 15 employees, $240,300
  • Pure Cotton, Inc., no employees, $500

The Labor Commissioner’s office is pursuing wage theft investigations of the contractors.

Topics California Workers' Compensation Contractors

Was this article valuable?

Here are more articles you may enjoy.

From This Issue

Insurance Journal West September 17, 2018
September 17, 2018
Insurance Journal West Magazine

Surplus Lines: Wholesale & Specialty Insurance Association Annual (formerly NAPSLO Annual); Market: Energy