FABRIC Act
- Sponsor
- Sen. Gillibrand, Kirsten E. [D-NY]
- Committees
- Health, Education, Labor, and Pensions Committee (primary)
- Last action
- Sep 14, 2026
Bottom line
The FABRIC Act aims to improve labor standards and transparency in the U.S. garment industry by ensuring fair wages and holding brands accountable, while also supporting domestic manufacturing through grants and a dedicated federal office.
What it actually does
This bill amends the Fair Labor Standards Act of 1938 to prohibit piece-rate pay for garment industry employees, mandating hourly wages at or above the federal minimum wage. It establishes joint and several liability for brand guarantors for wage violations by their contractors, requires garment manufacturers and contractors to register annually with the Department of Labor, creates a new Office of the Garment Industry, and establishes a grant program to support domestic garment manufacturing.
Proponents argue
Supporters argue the bill directly addresses pervasive wage theft and exploitative labor practices, particularly the piece-rate system, ensuring fair wages and holding powerful brands accountable for their supply chains. They contend it will strengthen the domestic garment industry, create better jobs, and promote ethical manufacturing practices in the United States.
Opponents contend
Critics might argue that the bill's stringent regulations, including the prohibition of piece-rate pay and the imposition of joint liability, could significantly increase operational costs for manufacturers and brands. This could potentially lead to job losses, reduced competitiveness for domestic production, or a shift of manufacturing operations overseas to avoid compliance burdens.
The bill is relatively concise for its scope, allowing an informed reader to grasp its core provisions within a reasonable timeframe.
Section 2(a)(1), inserting new Section 8(a) and 8(b) into the FLSA
Piece-Rate Prohibition and Hourly Wage Requirement
This provision prohibits employers in the garment industry from paying employees by the piece or unit. Instead, it mandates that garment industry employees be paid at an hourly rate that is not less than the federal minimum wage. It clarifies that incentive-based bonuses are still permitted, provided they do not replace the hourly wage.
Supporters argue
Supporters argue this provision directly combats wage theft and exploitation prevalent in the garment industry, where piece-rate systems often result in workers earning below minimum wage for long hours. It ensures a baseline fair wage and improves working conditions.
Critics contend
Critics may argue that piece-rate pay incentivizes productivity and allows skilled workers to earn more based on output. Prohibiting it could reduce worker motivation and increase labor costs, potentially making U.S. manufacturing less competitive or leading to job reductions.
Tradeoffs
This provision balances the goal of worker protection and ensuring fair wages against potential impacts on manufacturing costs and traditional incentive structures within the industry.
Section 2(a)(1), inserting new Section 8(c) into the FLSA
Brand Guarantor Joint and Several Liability
This provision establishes that 'brand guarantors' (defined as any person contracting for garment manufacturing, including through licensing a brand) share joint and several liability with their contractors for any wage violations under the FLSA concerning employees working on their brand's garments. This liability extends through any subcontracts.
Section 2(a)(1), inserting new Section 8(d) into the FLSA
Collective Bargaining Agreement Exemption
The prohibition on piece-rate pay and the hourly wage requirements do not apply to garment industry employees covered by a bona fide collective bargaining agreement (CBA). To qualify, the CBA must expressly provide for wages, hours, working conditions, overtime at one and one-half times the regular rate, a minimum hourly rate at least 10% above the higher of state or federal minimum wage, and a dispute resolution process.
Section 3
Garment Industry Registration Requirement
This section mandates that all garment manufacturers and contractors register annually with the Department of Labor. The registration requires detailed information about ownership, employees, financial interests, and compliance history, along with photographic identification and proof of workers' compensation insurance. An annual registration fee of at least $200 is also required.
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, to be headed by an Undersecretary of the Garment Industry. The Undersecretary is tasked with carrying out the new registration requirements, managing the domestic manufacturing support program, and assisting the Wage and Hour Division in enforcing the FLSA in the garment industry.
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. Grant funds can be used for investments in training, equipment acquisition, facility improvements (including health and safety), and educating employees about their rights.
This provision amends the FLSA to explicitly make violations of the new Section 8 (piece-rate prohibition, hourly wage, joint liability) unlawful. It also adds an affirmative defense for brand guarantors if they can demonstrate 'no knowledge' of a violation. Furthermore, it clarifies that violators are liable for lost wages and an additional equal amount as liquidated damages, applying existing FLSA enforcement authorities to these new provisions.
Section 2(a)(2) & (3) amending FLSA Sections 15(a) and 16(b) and (c)
Why it matters:It is standard legislative practice to integrate new prohibitions and liabilities into existing enforcement frameworks to ensure consistency and leverage established legal processes. The affirmative defense is a critical detail for defining the scope of brand guarantor liability.
Case for: Supporters argue that integrating these provisions into existing FLSA enforcement mechanisms ensures consistency and leverages established legal processes. The affirmative defense provides a reasonable safeguard for brands that genuinely have no knowledge of violations, promoting fairness.
Case against: Critics might argue that the 'no knowledge' affirmative defense could create a loophole, potentially allowing brands to avoid liability by claiming ignorance rather than actively monitoring their supply chains, thereby weakening accountability.
Estimated impact: This clarifies the legal recourse for workers and defines the potential financial exposure for violators, including brand guarantors, which is essential for the practical effectiveness of the new liability provisions.
The amendments made by Section 2 of the Act, which include the piece-rate prohibition, hourly wage requirement, and joint and several liability for brand guarantors, shall take effect on the date that is 6 months after the date of enactment of this Act.
Section 2(c)
Why it matters:It is standard legislative practice to specify effective dates at the end of a section or bill. This allows for a clear transition period for affected parties to adapt to new legal requirements.
Case for: Supporters argue that a 6-month delay provides businesses with a reasonable transition period to adjust their payroll systems, update contracts, and implement new supply chain oversight measures to comply with the new requirements.
Case against: Worker advocates might argue that a 6-month delay postpones essential protections for vulnerable workers who are currently experiencing wage theft or exploitation, suggesting that a shorter transition period would be more appropriate.
Estimated impact: This provision dictates the timeline for industry adaptation, influencing the immediate economic impact and compliance burden on businesses, and delaying the benefits of the new protections for workers.