(Reuters) – California Governor Gavin Newsom signed a bill on Monday that will ensure thousands of workers in the garment industry are paid a minimum wage by the hour instead of a piece-rate compensation.

Newsom signed Senate Bill 62 also known as Garment Worker Protection Act. This bill will make it possible for garment workers in California to be paid a minimum of $14 an hour by employers who employ 26 or more people.

Newsom stated that California is holding companies accountable and acknowledging the dignity and humanity our workers who helped to build the fifth largest economy in the globe.

This protects low-wage, marginalized workers of color, women of color, and immigrants by ensuring that they get what they deserve and improving their work conditions. As we strive to make the economy more inclusive and stronger, we will be there for them,” he said.

American Apparel and Footwear Association, a trade group representing the industry, said that earlier legislation could drive California’s garment manufacturing away from the state and cause the loss jobs.

According to the Garment Worker Center, Los Angeles is home to the largest concentration of workers in the garment industry. There are approximately 2,000 factories that employ more than 40,000.

According to it, many small factories are often not registered or enforced which leads to industry exploitation.

Around 85% of garment workers don’t earn minimum wages and instead receive a rate per item of 2-6 cents. The work rights group estimates that most garment workers work between 60 and 70 hours per week with a pay home of $300.

Newsom signed the bill, which was welcomed by the organisation.