Merch Maker For Top Performers Committed Wage Theft, Investigation Finds

The Department of Labor found Graphic Kings, a merchandise manufacturer for top performers like Ariana Grande, Rolling Stones, and Lady Gaga, denied workers overtime wages.

Official merch for top artists including Britney Spears, Lady Gaga, Rolling Stones, Willie Nelson, or Ariana Grande may have been made by workers at a San Diego silk-screening contractor who denied them the wages they earned for their work, found an investigation by the U.S. Department of Labor.

According to the Department's Wage and Hour Division, San Diego-based King Graphics, a silk-screening and embroidery shop that's been in business for 20 years, violated the Fair Labor Standards Act (FLSA) because it shortchanged workers of wages by failing to pay overtime at time and one-half the required rate of pay for all hours worked over 40 in a workweek.

During a visit to King Graphics last fall, Wage and Hour investigators requested the company refrain from shipping a truckload of hot goods – items made in violation of the FLSA's minimum wage, overtime, or child labor requirements – including Britney Spears' T-shirts headed to Target stores and other clothes for sale at retailers like Aeropostale, Footlocker, Hot Topic, Kohl's, Pacsun, and Urban Outfitters.

Under the FLSA's hot goods provision, the Department can seek a court order to prevent the interstate shipment of these goods, which can apply to both the employer who made the goods and anyone in possession of them. King Graphics agreed to pay $10,473 to lift the hot goods hold.

"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. 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," said acting administrator of the Wage and Hour Division Jessica Looman in a press release.

In April upon completion of the investigation, the U.S. District Court for the Southern District of California agreed to a judgment under which King Graphics agreed to shell out $134,957 in overtime pay and an equal amount in liquidated damages, a total of $269,914 to the affected 76 workers – which the merch maker will pay through a related class action brought by the employees. The company will also pay $10,473 in civil money penalties for the violations and has been ordered to hire an independent third party to monitor future FLSA compliance.

The division also investigated manufacturers who violated the FLSA by receiving and distributing hot goods from King Graphics. They include Solento Inc. in Encinitas, Bravado International Group in Hollywood, Civile Apparel LLC in San Diego, and Artists Merchants and Lasso Gear in L.A. The manufacturers submitted the requested records and assured the department they'll comply with FLSA to avoid future violations.

The dirty truth is that sweatshops and labor exploitation persist in Southern California. In L.A., cut-and-sew garment labor represents the second biggest industry. A 2016 U.S. Department of Labor investigation found pay violations in 85% of the L.A. garment shops it probed into. In addition to being paid as little as five cents per piece in some cases, garment workers have reported nonexistent safety training, excessive heat, locked exits, and pest infestation, according to Garment Worker Center.

On September 27, 2021, California Governor Gavin Newsom signed into law the Garment Worker Protection Act, which aims to produce fair wages and improved working conditions for garment workers. The Act took effect on January 1, 2022.

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