What Is the FABRIC Act and How Will It Change the Fashion Industry?
Thanks to consumer demand, more U.S. brands are paying attention to the ethics of their supply chains. For example, companies like J. Crew and Madewell produce some of their clothing in a fair trade certified factory. And now, even Walmart has a more eco-conscious line.
But most of the certifications we see in the garment industry are focused on international production. Have you thought about the ethics of clothing that was made in the USA?
Now, with the introduction of the FABRIC Act, more Americans are being made aware of the issues garment workers face right here in our own backyards.
About the FABRIC Act
The FABRIC Act is a US Senate bill aimed at protecting US garment workers from exploitation and encouraging garment manufacturing in the US rather than overseas. FABRIC stands for “Fashioning Accountability and Building Real Institutional Change.”
Right now people are mobilizing to get the FABRIC Act passed and made into US law.
According to thefabricact.org, a website aimed at getting the FABRIC Act passed, the bill is centered around five pillars:
- Enforcing minimum wage standards and eliminating wage theft in US garment factories.
- Increasing accountability on brands and retailers to combat workplace violations.
- Increasing transparency.
- Incentivizing reshoring with tax credits.
- Creating a $40 million domestic garment manufacturing grant program aimed at revitalizing the industry.
The FABRIC Act is technically an amendment to the Fair Labor Standards Act of 1938, which generally established US labor laws that prevent worker exploitation.
What Problem Does The FABRIC Act Address?
The bill itself has provisions to end piece rate pay for US garment workers.
Right now, many garment workers are paid a set amount for each garment they complete rather than by the hour. The supporters of the FABRIC Act see this as exploitative, and the bill aims to establish hourly wages for garment workers. The hourly wage paid to garment workers must be in line with current minimum wage law.
The bill also aims to ensure that companies who employ or contract with garment manufacturers cannot conveniently ignore exploitation. Garment sellers and brands would be jointly liable with garment manufacturers for violations of fair labor standards.
How the FABRIC Act Works
The bill would require manufacturers and contractors in the garment industry to register with the Department of Labor in order to ensure regulatory oversight. The secretary of labor will be required to appoint an Undersecretary of the Garment Industry to enforce the law.
The bill provides $40 million in grants to encourage garment manufacture in the US. Manufacturers can apply for the grants and individual grants will be no more than $5 million.
Companies will be prioritized for grants if they have a unionized labor force, are certified as minority-owned businesses, woman-owned businesses, or veteran-owned businesses, or if they have operated as a garment manufacturer in the US for more than five years.
Finally, the bill provides a thirty percent tax credit for expenses undertaken by garment manufacturers to move production to the US.
Why does the FABRIC Act Matter?
The bill is significant for several reasons. For one, it would raise the bar for garment manufacturing regulation around the globe, setting a groundbreaking example. It is also unique in that it is specific to the garment industry and pinpoints the abuses it is trying to address.
Some brands support the legislation because they see it as leveling the playing field. The supportive brands say that if they self-regulate, they are at a competitive disadvantage in the industry.
The FABRIC Act would force brands to comply across the board. Joint liability between brands and manufacturers is also a significant component of the bill praised by advocates of fair garment production. The bill is seen by many as an upscaling of a similar garment industry regulation bill, SB62, adopted in California in 2021.
The bill is part of a global push to close loopholes in regulating the garment industry and replace voluntary measures by companies with law.
The bill mixes penalties and rewards to accomplish its goals. Companies are penalized for violations, but they are also rewarded with incentives for actions such as allowing collective bargaining and onshoring manufacturing, as outlined above.
Will the FABRIC Act Bill Pass?
In order to pass – perhaps by the end of 2022 – the bill needs more support from both congressional representatives and their constituents.
The bill was introduced on May 12, 2022 by New York Senator Kirsten Gillibrand, who became known by many when she ran for the Democratic presidential nomination for the 2020 presidential election.
A few other senators who are also prominent for competing for the Democratic nomination co-sponsored the bill: Cory Booker of New Jersey, Elizabeth Warren of Massachusetts, and Bernie Sanders of Vermont.
The backers of the bill need to build bipartisan support, which they think they will be able to do given that the bill includes both regulations and incentives. They also need to educate other congressional representatives on the bill and gain more co-sponsors.
Constituents – like you – can support the bill by contacting their representatives and voicing their support for the bill.
It’s a Good Start
Ultimately, the FABRIC Act is just a starting point. State and federal minimum wages are often not a living wage. Establishing the minimum wage in the U.S. garment industry is the least we could ask for. Further advocacy is needed moving forward.
It is time for the U.S. to step up and be an example of positive change in the fashion industry.
