SECTION 1. SHORT TITLE AND REFERENCE.

    (a) Short Title.--This Act may be cited as the ``Stop Sweatshops 
Act''.
    (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.

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 are 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 
        and continues to adversely affect 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 is amended by 
adding 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) For purposes of this section:
            ``(1) The term `garment industry' means the designing, 
        cutting, sewing, dyeing, washing, finishing, assembling, 
        pressing, or otherwise producing 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 pre-manufactured items such as 
        buttons, zippers, snaps, and studs, designed or intended to be 
        worn by any individual which is to be sold or offered for sale.
            ``(2) The term `manufacturer' means any person 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 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 pre-manufactured items such as buttons, 
        zippers, snaps, and studs, designed or intended to be worn by 
        any individual which is to be sold or offered for sale, 
        including a retailer engaged in such activities, 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 pre-manufactured items such as 
        buttons, zippers, snaps, and studs, designed or intended to be 
        worn by any individual which is to be sold or offered for sale.
            ``(3) 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 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 pre-manufactured items such as buttons, 
        zippers, snaps, and studs, designed or intended to be worn by 
        any individual which 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 adding after the first sentence 
        the following: ``A manufacturer in the garment industry (as 
        defined in section 14A(b)(2)) 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)(3)) 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) by striking ``first sentence'' and inserting 
                ``first or second sentences''; and
                    (B) by inserting ``or by a manufacturer in the 
                garment industry'' after ``liable''.

SEC. 4. RECORDKEEPING.

    Section 16(e) (29 U.S.C. 216(e)) is amended by adding 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 $1000 for each 
employee who was the subject of such a violation. The Secretary may, in 
the Secretary's discretion, compute civil penalties under this 
subsection for each pay period for willful violations. Any person who 
submits fraudulent payroll records to the agencies enforcing this Act 
in any of its investigations or hearings or as evidence in a court 
action, which records 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 per act of fraud and $15,000 per 
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 from the date of its enactment.
Stop Sweatshops Act - Amends the Fair Labor Standards Act of 1938 to make garment industry manufacturers civilly liable for sweatshop conditions maintained by their contractors.  Sets forth civil penalties for violation of recordkeeping and payroll accounting requirements.
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