SECTION 1. SHORT TITLE AND REFERENCE.

    (a) Short Title.--This Act may be cited as the ``Stop Sweatshops 
Act of 1997''.
    (b) Reference.--Whenever in this Act an amendment or repeal is 
expressed in terms of an amendment to, or repeal of, a section or other 
provision, the reference shall be considered to be made to a section or 
other provision of the Fair Labor Standards Act of 1938 (29 U.S.C. 201 
et seq.).

SEC. 2. FINDINGS.

    The Congress makes the following findings:
            (1) The production of garments in violation of minimum 
        labor standards burdens commerce and the free flow of goods in 
        commerce by spreading and perpetuating labor conditions that 
        undermine minimum living standards and by providing an unfair 
        means of competition to the detriment of employers who comply 
        with the law.
            (2) The existence of working conditions detrimental to fair 
        competition and the maintenance of minimum standards of living 
        necessary for health, efficiency, and general well-being of 
        workers is a continuing and growing problem in the domestic 
        garment industry.
            (3) The Congress concurs in the findings of the Comptroller 
        General that most sweatshop employers violate the recordkeeping 
        requirements of the Fair Labor Standards Act of 1938 and that 
        the failure of such employers to maintain adequate records has 
        affected, and continues to affect adversely, the ability of the 
        Department of Labor to collect wages due to workers.
            (4) The amendment of the Fair Labor Standards Act of 1938 
        to provide for legal responsibility on the part of 
        manufacturers for compliance with such Act's wage and hour, 
        child labor, and industrial homework provisions by contractors 
        in the garment industry and to provide civil penalties for 
        violations of that Act's recordkeeping requirements is 
        necessary to promote fair competition and working conditions 
        that are not detrimental to the maintenance of health, 
        efficiency, and general well-being of workers in the garment 
        industry.

SEC. 3. LEGAL RESPONSIBILITY FOR COMPLIANCE WITH WAGE AND HOUR 
              PROVISIONS IN THE GARMENT INDUSTRY.

    (a) Amendment.--The Fair Labor Standards Act of 1938 (29 U.S.C. 201 
et seq.) is amended by inserting after section 14 the following:

  ``legal responsibility for compliance in the garment industry with 
                            sections 6 and 7

    ``Sec. 14A. (a) Every manufacturer engaged in the garment industry 
who contracts to have garment manufacturing operations performed by 
another person as a contractor--
            ``(1) shall be civilly liable, with respect to those 
        garment manufacturing operations, to the same extent as the 
        contractor for any violation by the contractor of section 6 
        (except for violations of subsection (d)) or 7, for any 
        violation by the contractor of the provisions of section 11 
        regulating, restricting, or prohibiting industrial homework, 
        and for violation by the contractor of section 12; and
            ``(2) shall be subject to the same civil penalties assessed 
        against the contractor for violations of such sections.
    ``(b) In this section:
            ``(1) The term `contractor' means any person who contracts, 
        directly or indirectly through an intermediary or otherwise, 
        with a manufacturer to perform the cutting, sewing, dyeing, 
        washing, finishing, assembling, pressing, or otherwise 
        producing of any men's, women's, children's, or infants' 
        apparel (including clothing, knit goods, hats, gloves, 
handbags, hosiery, ties, scarves, and belts, or a section or component 
of apparel, except for premanufactured items such as buttons, zippers, 
snaps, and studs) that is designed or intended to be worn by any 
individual and that is to be sold or offered for sale.
            ``(2) The term `garment industry' means the designing, 
        cutting, sewing, dyeing, washing, finishing, assembling, 
        pressing, or otherwise producing of men's, women's, children's, 
        or infants' apparel (including clothing, knit goods, hats, 
        gloves, handbags, hosiery, ties, scarves, and belts, or a 
        section or component of apparel, except for premanufactured 
        items such as buttons, zippers, snaps, and studs) that is 
        designed or intended to be worn by any individual and that is 
        to be sold or offered for sale.
            ``(3) The term `manufacturer' means any person, including a 
        retailer, who--
                    ``(A) contracts, directly or indirectly through an 
                intermediary or otherwise, with a contractor to perform 
                the cutting, sewing, dyeing, washing, finishing, 
                assembling, pressing, or otherwise producing of any 
men's, women's, children's, or infants' apparel (including clothing, 
knit goods, hats, gloves, handbags, hosiery, ties, scarves, and belts, 
or a section or component of apparel, except for premanufactured items 
such as buttons, zippers, snaps, and studs) that is designed or 
intended to be worn by any individual and that is to be sold or offered 
for sale; or
                    ``(B) designs, cuts, sews, dyes, washes, finishes, 
                assembles, presses, or otherwise produces or is 
                responsible for the production of any men's, women's, 
                children's, or infants' apparel (including clothing, 
                knit goods, hats, gloves, handbags, hosiery, ties, 
                scarves, and belts, or a section or component of 
                apparel, except for premanufactured items such as 
                buttons, zippers, snaps, and studs) that is designed or 
                intended to be worn by any individual and that is to be 
                sold or offered for sale.
            ``(4) The term `retailer' means any person engaged in the 
        sale of apparel to the ultimate consumer for personal use.''.
    (b) Liability to Employees.--Section 16 (29 U.S.C. 216) is 
amended--
            (1) in subsection (b), by inserting after the first 
        sentence the following: ``A manufacturer in the garment 
        industry (as defined in section 14A(b)(3)) shall also be 
        jointly and severally liable to such an employee to the same 
        extent as the contractor in the garment industry (as defined in 
        section 14A(b)(1)) who employed such employee if the contractor 
        violated section 6 (other than subsection (d)) or 7 in the 
        production of apparel or components of apparel for such 
        manufacturer.'';
            (2) in subsection (b), by inserting in the last sentence 
        ``or by a manufacturer in the garment industry'' after ``by an 
        employer''; and
            (3) in subsection (c)--
                    (A) in the third sentence, by striking ``first 
                sentence'' and inserting ``first or second sentence''; 
                and
                    (B) in the third sentence, by inserting ``or by a 
                manufacturer in the garment industry'' before 
                ``liable''.

SEC. 4. RECORDKEEPING.

    Section 16(e) (29 U.S.C. 216(e)) is amended by inserting after the 
first sentence the following: ``Any person who fails to establish, 
maintain, and preserve payroll records as required under section 11(c) 
shall be subject to a civil penalty of not to exceed $1,000 for each 
employee who was the subject of such a violation. The Secretary may, in 
the Secretary's discretion, impose civil penalties under this 
subsection for willful violations. Any person who submits fraudulent 
payroll records to the agencies enforcing this Act in any of the 
agencies' investigations or hearings, or as evidence in a court action, 
that conceal the actual hours of labor worked by employees or the 
violation of section 6, 7, 11(d), or 12 shall be subject to a civil 
penalty of $10,000 for each act of fraud and $15,000 for each act of 
fraud for a second offense.''.

SEC. 5. EFFECTIVE DATE.

    The amendments made by this Act shall take effect upon the 
expiration of 30 days after the date of enactment of this Act.
Stop Sweatshops Act of 1997 - Amends the Fair Labor Standards Act of 1938 to provide for the civil liability of manufacturers (including retailers) for sweatshop conditions maintained by their contractors in the garment industry.  Sets forth civil penalties for violation of recordkeeping and payroll accounting requirements.
Stop Sweatshops Act of 1997