Apparel manufacturing in California

We’ve discussed this topic on FI in fits and starts but a piece from today’s mail makes me think we should cover this officially:

We are a small studio in southern california making a transition from teaching textile techniques to designing a line of baby blankets, pillows, and accessories. It is our intent to follow that up with a line of clothing focused on the same buyers. We have made all of our own patterns, and are sewing our prototypes in our studio.

After reading your book we are considering going to contractors for some professional help before starting real manufacturing. Before going to either a contractor or deciding to just do our own small scale manufacturing of these goods, we have read on your website and now on the links, that we may need to procure a registration from California to continue forward. In your opinion is this correct (if we have 2 or 3 of us sewing blankets in our studio for sale?)

Also, when following the links on your site to the CA Gov site, it appeared that to get a registration number we needed to take an exam. How do we find out what we need to study to pass this exam?

Based on information from the State of California website, “every person engaged in the business of garment manufacturing must register with the Labor Commissioner”.

The term person is defined as:

…any individual, partnership, corporation, limited liability company, or association, and includes, but is not limited to, employers, manufacturers, jobbers, wholesalers, contractors, subcontractors, and any other person or entity engaged in the business of garment manufacturing.

Garment manufacturing is defined as:

“Garment manufacturing” 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, including, but not limited to, clothing, hats, gloves, handbags, hosiery, ties, scarfs, and belts, for sale or resale by any person or any persons contracting to have those operations performed and other operations and practices in the apparel industry as may be identified in regulations of the Department of Industrial Relations consistent with the purposes of this part. Labor Code Section 2671(b).

In other words, even though bedding is not specifically mentioned, the intent of the law is clear so I wouldn’t waste time quibbling. The regulations would require you to have a license even if you did not intend to produce apparel later. The regulations are all inclusive. Even if you are sewing for profit by yourself at home, you will need a permit -except in cases of making clothing to order (custom work).

The registration requirements for new applicants (pdf) are comprehensive. As an ongoing enterprise, you should already have the required supporting documentation. Everyone else will need to go through the gauntlet of getting official with state and local offices and the IRS first. You will need to fill out the Application for Registration (pdf), include all attachments and include the $25 application fee (certified check, cashier’s check or money order). Once you’ve submitted your application, the state will issue you a file number along with an authorization for examination letter (which explains where and when you can take the exam). This packet will also include the study materials for the exam.

There is a fee beyond the application fee. The registration cost for the first year is $200 for sewing contractors and $750 for manufacturers. You will have to pay this fee annually to stay current. Subsequent renewal fees are sliding scale, based on your sales from the previous year (they’ll want to see quarterly reports). The minimum fee is $750 for manufacturers based on annual sales of $1-$500,000. The fee on sales from $500,000 to one million is $1,000.

With regard to your situation, there are penalties (I don’t know how severe) for manufacturing without having obtained registration. I can only urge you to cease manufacturing until you can get one. There is one sticking point; the application asks whether you’ve been manufacturing without a license but answering in the affirmative can expose you to penalties or denial of your application. Accordingly (don’t you dare say I said so or I’ll deny it) I don’t know that you should disclose you’d been doing this prior to seeking license. The application specifically states one may not commence manufacturing until the registration has been granted.

The upside of licensing is that it makes searching for sewing contractors in the state much easier. The included link also includes links to databases in NJ and NY.

[amended] Abigail sends an important comment so I will be updating this post once I can verify it with the state office.

Other entries in this series you may find useful are:
California Garment License for Out of State Companies This should be read by California residents too.
Studying for the California garment exam
Apparel Manufacturing in New Jersey
Apparel Manufacturing in New York

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