DOL Obtains Default Judgment against California Garment Manufacturer

A U.S. district court judge has ruled in favor of the Department of Labor in a case against a Westminster, Calif., garment manufacturer and its owner, awarding a total of $887,554 to current and former workers (Case No. 2:10:-CV-02805 AHM (PJW)). Judge A. Howard Matz approved the department's request for a default judgment against Laundry Room Clothing Inc., owner Milton Kaneda and principal Sharon Kaneda after they failed to pay $380,824 in unpaid minimum wage and overtime compensation due to 115 low-wage workers. The default judgment also awards the workers $506,730 in liquidated damages.

"Low-wage workers, such as those employed at garment shops throughout Southern California, are particularly vulnerable," said Secretary of Labor Hilda L. Solis. "The Department of Labor will not hesitate to hold employers accountable for paying their employees the wages they have earned."

A series of investigations by DOL's Wage and Hour Division found that Laundry Room and the Kanedas missed several payrolls. In April, the court granted the department's request to monitor the business's payrolls to ensure employees were being paid on time. While the company paid employees on an ongoing basis following the April court order, workers were not paid back wages for payrolls missed between Feb. 7, 2009, and March 31, 2010. Laundry Room Inc. has produced goods for national retailers including Forever 21 and Ross Stores Inc.

The Fair Labor Standards Act requires that covered employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates of pay for hours worked beyond 40 per week. Employers must also maintain accurate time and payroll records.

The case was investigated by the Wage and Hour Division's Orange Area Office. DOL's regional Office of the Solicitor in San Francisco, represented the secretary of labor in the case.

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