FABRIC Act
- Sponsor
- Rep. Nadler, Jerrold [D-NY-12]
- Committees
- Education and Workforce Committee (primary)
- Last action
- Sep 14, 2026
Bottom line
The FABRIC Act aims to reform labor practices in the U.S. garment industry by eliminating piece-rate pay, increasing accountability for brands, and supporting domestic manufacturing through new regulations and grants.
What it actually does
This bill amends the Fair Labor Standards Act of 1938 (FLSA) to prohibit piece-rate pay for garment industry employees, mandating an hourly wage not less than the federal minimum wage, while allowing incentive bonuses. It establishes joint and several liability for 'brand guarantors' (brands contracting for garment manufacturing) for FLSA violations by their contractors. The bill also requires garment manufacturers and contractors to register annually with the Department of Labor (DOL), creates a new Office of the Garment Industry and an Undersecretary within DOL, and authorizes a $100 million grant program to support domestic garment manufacturing.
Proponents argue
Proponents argue that the bill is essential to combat wage theft and exploitative labor practices prevalent in the garment industry, particularly the piece-rate system which often results in workers being paid below minimum wage. They contend that holding brand guarantors jointly liable will incentivize responsible sourcing and improve working conditions, while the grant program will bolster ethical domestic manufacturing and create stable, well-paying jobs.
Opponents contend
Opponents might argue that the bill imposes significant new regulatory burdens and costs on garment manufacturers and brands, potentially leading to increased consumer prices, reduced competitiveness for domestic producers, or a shift of manufacturing overseas. They may also contend that eliminating piece-rate pay removes flexibility for workers who prefer it and that the joint liability provisions could create an overly litigious environment, stifling innovation and investment in the U.S. garment sector.
The bill is moderately complex due to its legal amendments and new programmatic structures, requiring a focused read to grasp its full implications within the given timeframe.
Section 2(a), new FLSA Section 8(a)-(b)
Prohibition of Piece Rate and Mandate for Hourly Pay in Garment Industry
This provision prohibits employers in the garment industry from paying employees by piece rate (per unit produced). Instead, it mandates that these employees must be paid at an hourly rate that is at least the federal minimum wage. However, it explicitly allows for incentive-based bonuses, including those determined by production, as long as the base hourly wage requirement is met.
Supporters argue
Supporters argue this provision directly addresses wage theft and ensures garment workers receive at least the federal minimum wage, preventing exploitation common under piece-rate systems where workers often earn less than minimum wage due to production quotas.
Critics contend
Critics may contend that eliminating piece-rate pay removes flexibility for both employers and employees, as some workers may prefer the potential for higher earnings through increased productivity. They might also argue it could reduce overall productivity and increase labor costs, making domestic manufacturing less competitive.
Tradeoffs
This provision balances the goal of ensuring fair minimum wages and preventing exploitation against concerns about reduced worker flexibility, potential increases in production costs, and impacts on the competitiveness of the domestic garment industry.
Section 2(a), new FLSA Section 8(c)
Joint and Several Liability for Brand Guarantors
This section establishes that 'brand guarantors' (any person or entity that contracts for garment manufacturing, including through licensing a brand or name) will share joint and several liability with their contractors for any FLSA violations involving employees working on their brand's garments. This liability extends through subcontracts.
Section 2(a), new FLSA Section 8(d)
Exemption for Collective Bargaining Agreements
The prohibition on piece-rate pay and the hourly wage mandate do not apply to garment industry employees covered by a bona fide collective bargaining agreement (CBA). To qualify for this exemption, the CBA must expressly provide for wages, hours, working conditions, overtime at 1.5 times the regular rate for hours over 40, a minimum hourly rate at least 10% higher than the applicable state or federal minimum wage (whichever is higher), and a dispute resolution process for wage nonpayment.
Section 3
Registration of Garment Manufacturers and Contractors
This section requires all garment manufacturers and contractors to register annually with the Department of Labor (DOL) starting six months after enactment. Registration entails submitting detailed information about the business, its owners, and employees, photographic identification, proof of workers' compensation insurance, and a registration fee. The DOL will issue certificates, which must be posted, and can suspend or revoke them for misrepresentation or non-compliance. Violations can incur civil penalties up to $50,000,000.
Section 4
Establishment of Office of the Garment Industry and Undersecretary
This section establishes a new Office of the Garment Industry within the Department of Labor, headed by an Undersecretary of the Garment Industry. The Undersecretary is tasked with carrying out the new registration requirements (Section 3), administering the domestic garment manufacturing support program (Section 5), and assisting the Wage and Hour Division in enforcing the new FLSA Section 8. The bill authorizes appropriations of $10 million for FY2027 and $3 million annually for FY2028-2032 for the Office's functions.
Section 5
National Domestic Garment Manufacturing Support Program
This section establishes a competitive grant program, administered by the new Undersecretary, to support garment manufacturing in the United States. Eligible entities include U.S.-incorporated garment manufacturers and non-profit organizations providing workforce development in the garment industry. Grants, capped at $5 million, can be used for workforce training, equipment acquisition, facility improvements (including health and safety), and educating employees about their rights. Priority is given to unionized, minority/women/veteran-owned, or long-standing businesses. The bill authorizes $100 million for this program.
This subsection repeals Section 10 of the Fair Labor Standards Act of 1938 (29 U.S.C. 210), which grants the Secretary of Labor broad powers for investigations and inspections related to wages, hours, and conditions of employment, including the authority to enter workplaces, question employees, examine records, and issue subpoenas.
Section 2(b)
Why it matters:The repeal of FLSA Section 10 appears to be a significant drafting error or an extremely subtle, potentially contradictory, legislative maneuver. Its literal effect would be to strip the Department of Labor of its fundamental investigative and enforcement powers under the entire FLSA, including the very provisions this bill seeks to enact. If intentional, it would be highly evasive, as it undermines the bill's stated goals of enhanced enforcement.
Case for: There is no clear case for repealing FLSA Section 10 if the intent of the bill is to strengthen labor law enforcement. If it is a drafting error, the case would be for its immediate correction. If there's an obscure intent, it's not apparent in the bill text.
Case against: Critics would strongly argue against this repeal, as it would effectively gut the Department of Labor's ability to investigate and enforce any labor standards, including the new ones created by this bill. It would render the new wage and liability provisions largely unenforceable by federal authorities.
Estimated impact: Potentially catastrophic for federal labor law enforcement, removing the primary investigative tools for the Department of Labor across all industries covered by the FLSA.
This new subsection adds an affirmative defense for brand guarantors facing an action for violating the new FLSA Section 8. A brand guarantor can avoid liability if they can demonstrate 'no knowledge of the violation of section 8 alleged in such action.'
Section 2(a), new FLSA Section 15(c)
Why it matters:This provision is likely included to mitigate some of the concerns from brand guarantors about broad, strict liability. It represents a compromise, allowing brands to avoid liability if they can prove a lack of knowledge, which could be seen as a way to make the joint liability provision more palatable while still encouraging due diligence. It's standard legislative practice to include such defenses.
Case for: Proponents of this defense argue it provides a reasonable safeguard for brands, preventing them from being held liable for violations they genuinely could not have known about, thereby making the joint liability provision more equitable and less punitive.
Case against: Critics might argue that this 'no knowledge' defense could create a loophole, incentivizing brands to maintain a willful ignorance of their supply chain practices to avoid liability, thus undermining the intent of joint and several liability to drive greater oversight and accountability.
Estimated impact: Potentially significant, as the effectiveness of the joint liability provision hinges on how 'no knowledge' is interpreted and proven in practice, affecting the actual financial risk for brand guarantors.
This provision authorizes the Secretary of Labor to impose a civil money penalty of 'not more than $50,000,000' against any person who violates a requirement under Section 3 (the registration requirements).
Section 3(g)(1)
Why it matters:The high penalty is likely intended to serve as a strong deterrent against non-compliance with the registration requirements, emphasizing the seriousness with which the government views transparency and accountability in the garment industry. It's a clear signal of intent, though the specific figure is notable.
Case for: Proponents argue that such a substantial penalty is necessary to ensure compliance from large corporations and to deter deliberate attempts to evade registration, which is foundational to the bill's enforcement strategy.
Case against: Critics might argue that a $50 million penalty for a registration violation is disproportionately high, especially for smaller businesses, and could lead to excessive fines that are not commensurate with the nature of the offense, potentially driving businesses into bankruptcy.
Estimated impact: Potentially very high financial impact for non-compliant entities, serving as a powerful deterrent for registration violations.