S. 5393 — FABRIC Act

This section prohibits employers in the garment industry from paying covered employees by piece rate and requires hourly wages no less than the federal minimum wage under section 6(a)(1). It imposes joint and several liability on brand guarantors for violations by their contractors or subcontractors. It exempts employees covered by qualifying collective bargaining agreements that provide overtime at more than 1.5 times the regular rate, a minimum hourly wage at least 10 percent above the higher of the federal or applicable state minimum, and a wage dispute process. It defines garment manufacturing, brand guarantor, and related terms.

This section requires every garment manufacturer and contractor to register annually with the Secretary of Labor beginning six months after enactment. Registration demands a form listing all production employees, owners, partners, officers, the ten largest shareholders, and persons with financial interests; photographic identification of owners and officers; proof of workers’ compensation coverage for all production employees; disclosure of any Fair Labor Standards Act violations in the preceding three years; and payment of a fee of at least $200.

This section establishes the Office of the Garment Industry in the Department of Labor, headed by an Undersecretary of the Garment Industry appointed by the Secretary of Labor. The Undersecretary carries out section 3, the national domestic garment manufacturing support program under section 5, and assists the Wage and Hour Division Administrator in enforcing section 8 of the Fair Labor Standards Act of 1938. It authorizes appropriations of $10 million for fiscal year 2027 and $3 million for each of fiscal years 2028 through 2032, available until expended.

This section establishes a competitive grant program, administered by the Secretary of Labor, to support domestic garment manufacturing. It authorizes $100 million for grants of up to $5 million each to U.S. garment manufacturers and workforce development nonprofits, with priority for entities whose workforce is covered by a collective bargaining agreement, that are certified minority-, women-, or veteran-owned businesses, or that have operated for more than 5 years; grant funds may support training, equipment acquisition, facility improvements for health and safety, and worker rights education.

This section provides that if any provision of the Act or amendment made by the Act is held unconstitutional, the remainder of the Act and its amendments remain in effect and apply to other persons and circumstances.