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N.Y. officials: Factory for big retailers 'paid sweatshop wages'

  • Story Highlights
  • New York Labor Department: Factory underpaid workers by $5.5 million
  • Factory made garments for retailers including Macy's, The Gap, Express
  • Factory coached workers to lie to investigators about conditions, state says
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NEW YORK (CNN) -- Employees were underpaid millions of dollars and worked under sweatshop conditions at a New York factory that made garments for major retailers including Macy's and The Gap, the state Department of Labor said Wednesday.

Jin Shun -- which also made garments for Banana Republic, Express, Victoria's Secret, The Limited and Coldwater Creek -- underpaid about 100 employees by more than $3 million since 2005 and coached them to lie to investigators about their working conditions, the department said.

Before 2005, the factory -- then operating under the name Venture 47 -- underpaid its workforce by $2.5 million, according to the department.

The department cited the company for allegedly falsifying employee time records and violating wage laws.

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"This factory paid sweatshop wages, kept fake records and coached employees to lie even though it had signed retailer codes of conduct to comply with the law," Labor Commissioner M. Patricia Smith said.

The company gave employees a "cheat sheet" of answers they were to memorize and use if they were questioned by labor investigators, she said.

Smith said one woman worked at the factory for 60 to 70 hours per week and was paid 22 cents per garment or 40 cents for more complicated pieces.

The employee was instructed to keep two time cards per week -- one starting on Monday and the second starting on Wednesday -- so that neither would document more than 40 hours, Smith said.

When labor investigators asked for time records, they were given only one set of cards per employee, the department said.

Wednesday morning, the Labor Department tagged more than 10,000 items made by the factory with notices reading: "Legal wages have not been paid for the manufacture of this garment."

Within hours, the department said, Urban Apparel, the manufacturer that hired Jin Shun, paid $60,000 to have the tags removed.

Macy's, Gap Inc. (parent company of The Gap and Banana Republic), Limited Brands (parent company of Victoria's Secret and Express) and Coldwater Creek said in separate statements that they take the matter seriously and have strict policies and guidelines about fair working conditions with their suppliers.

Neither Gap Inc. nor Coldwater Creek currently had production in the factory.

A spokesman for Limited Brands told New York's Newsday that it had "zero tolerance" for vendors that violate labor standards.

From CNN's Laura Batchelor

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