Work-at-home schemes: tailoring a policy fair to all may not be easy

After initially planning to eliminate restrictions on industrial homework -- the practice of giving work to employees to do in their homes -- the US Labor Department is reconsidering its position following a barrage of criticism from industry and labor leaders.

The official commentary period on lifting the ban ended July 6. Labor Secretary Raymond J. Donovan began collecting opinions shortly after he took office in January.

The Labor Department now is considering making a distinction between urban and rural areas. The restrictions would be lifted in sparsely populated areas like Vermont and New Hampshire while leaving them intact for densely populated New York City and Los Angeles metropolitan areas.

The Fair Labor Standards Act (FLSA) restricts homework in seven different industries, the most important being women's apparel, jewelry, and knitted sportswear.

A broad spectrum of workers and businesses are affected by the homework restrictions.

Sportswear knitters in Vermont, for example, are often middle-class housewives and provide a second source of family income. Although paid by the number of pieces produced, they say that they are able to earn more than the $3. 35 per hour federal minimum wage.

In northern New Jersey, where recent Cuban and Hispanic immigrants live, conditions are much different. Living and working in low-cost tenements, homeworkers sew inexpensive ladies sportswear and lingerie on a piecework basis. Employed by small garment shop owners, they often make about $100 per week for more than 50 hours of work.

Business and union leaders in large urban areas, where most of these clothes are sewn, agree that lifting homework regulations would lead to a spread of illegal "sweatshops."

"Homework is a big problem," says Joseph Danahy, New York district manager of the International Ladies Garment Workers Union, the nation's largest garment workers union."It leads to the sweatshop problem. They [sweatshop employees] work in the shops during the day and at home at night.In other cases, they work strictly in their homes. We don't know of any cases in which these people make anywhere near the federal minimum wage."

According to Kurt Barnard, executive director of the Federation of Apparel Manufacturers, which represents roughly 85 percent of all the women's and children's clothes manufacturers in the nation, lifting homework restriction would "encourage a lot of people to establish garment factories without a major financial investment."

He explains that "upstart" firms wouldn't have to make large expenditures for factory equipment since sewing would be done in individual homes at the worker's expense. The existing manufacturers, who have high operating costs, "wouldn't be remotely competitive."

Residents of rural areas, on the other hand, contend that the laws eliminate the only livelihood for thousands of people.

Attorney Robert Ruddock of the New England Legal Foundation in Boston says that homework is the only employment for women with young children to care for. Because of the lack of public transportation and the high cost of traveling long distances in private vehicles, these women are prevented from commuting to work.

The whole controversy began two years ago when the Carter administration decided to sue C.B. Sports of Burlington, Vt., for failing to pay 38 homeworkers minimum wages to knit top-of-the-line ski hats.

The homework restrictions were appended to the original Fair Labor Standards Act of 1938 specifically to check the growth of unsafe and unhealthy sweatshops. The garment and jewelry industries were two of seven industries targeted by the Roosevelt administration as likely to violate the act.

Faced with pursuing litigation inconsistent with the incoming administration's antiregulatory goals, Secretary Donovan has been in a tough position as he attempts to reconcile both camps as well as satisfy the mood at the White House.

The proposal to distinguish between rural and urban areas is not likely to mollify all parties. "The distinction is artificial," states Mr. Ruddock, who represents nine of the 38 knitters for C.B. Sports. "The Labor Department already has the means by which to restrict sweatshop abuses -- in the form of industry registration and wage and safety laws."

Michael Avakian, an attorney for the Center on National Labor Policy, an independent consulting firm in Washington, claims that the distinction might be unconstitutional.

Regardless of where they live, "people have the right to pursue their occupation," declares Mr. Avakian.

"It's the rural workers who are really behind the eightball when it comes to homework," he claims. "Urban workers can always find anot her job."