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Monday, Oct. 12, 2009

Certification requirement puts costly hold on Modesto store's on-site embroidery work

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A stitch in time saves nine, but Modesto's Crescent Work & Outdoor learned not having a license to make that stitch could end up losing them more than three months of work and tens of thousands of dollars.

The Modesto uniform and outdoor supply store has been doing on-site embroidery for the past three years.

Employees stitch everything from company logos to law enforcement seals on premade apparel for custom orders.

On June 19, the store received a surprise visit from an inspector with the California Department of Industrial Relations who said it was violating the garment manufacturing labor code.

"I had no idea such a thing even existed," said co-owner Tiffani Stott, whose business has been in her family for 60 years. "I feel it's extremely difficult for small businesses to navigate through the system, especially when most small businesses are struggling right now."

Under California law, all garment manufacturers must have a garment registration certificate allowing them to do on-site work or contract out orders.

But what Crescent and many small businesses do not realize is how broad the state's definition of "garment manufacturing" is.

On the Department of Industrial Relations Web site it means: "Sewing, cutting, making, processing, repairing, finishing, assembling, or otherwise preparing any garment or any article of wearing apparel or accessories designed or intended to be worn by any individual ... for sale or resale."

Alterations are exempt but embroidering or printing anything, even if the business didn't manufacture the original item, falls under that umbrella.

Single owner/employee businesses also are exempt.

Crescent was hit with a $500 fine. To receive its certification, Stott had to pay a $2,500 registration fee, complete a six-page application and pass a certification test. The fee is required annually.

All embroidery work was shut down pending an approved permit.

Crescent's license was approved Sept. 22 and it has resumed embroidery work.

Store took a big hit

But Stott said the three-month wait cost the store $30,000 in revenue and other fees, as the 2-inch-thick folder of paperwork and legal documents she amassed attests.

She said she turned down about 10 requests a day while waiting for approval, in addition to losing untold return business.

She also had to lay off two employees, something she said she wouldn't have had to do otherwise.

"(This regulation) is detrimental for small business in California," Stott said. "It's a lot of red tape and a lot of expense. If I had all that money back I could support another employee."

Stott said the investigator told her the department had received a complaint from a competitor that the store was operating without a license. She said he said the department generally only investigates businesses who have complaints filed against them.

Representatives from the California Department of Industrial Relations did not return calls to The Bee.

Stott also questioned its enforcement based on the original code's intent.

Crescent employs one worker who runs its embroidery machine.

"I feel like they were not enforcing it the way it was designed. It wasn't designed to stop work in a small business," she said. "It was designed to stop sweatshops. I feel we were singled out."

Stott said she called around to other uniform and embroidery businesses she knows across the state and none of them knew they needed a certificate.

In Stanislaus County, only four other businesses — all in Modesto — hold valid certificates, according to the Department of Industrial Relations database. They are 5.11 Tactical, Royal Robbins, T's and Tops, and Image Imprint.