Regulating the Industry: A Running Tracker of Fashion-Focused Legislation

Fashion operates in a space with relatively minimal regulations, particularly when compared to other industries in the United States. In the absence of stringent rules, and in the face of a growing footprint thanks to increasingly complex supply chains and rising rates of consumption, and consumers that are increasingly demanding information about the environmental, social, and governance (“ESG”) elements of companies’ operations, fashion industry entities have largely turned to self-regulation. This has prompted an onslaught of mechanisms – from third-party certifications, such as B Corp. status, and controversial standardized measures like the Higg Index to the adoption of brand-crafted ESG-centric action plans – that are almost entirely devoid of legal consequences in the event that a company and/or its board fails to follow through. 

As for the fashion and apparel-focused regulations that do exist, they are not without drawbacks and/or loopholes. Laws that aim to ensure the safety of consumers, for instance, have been enforced with “an undercurrent of caveat emptor,” according to Melissa Gamble, an assistant professor in the Fashion Studies Department at Columbia College Chicago – or in other words, the laws make it so that “buyers are responsible for checking the quality and suitability of goods before a purchase is made.” At the same time, federal wage and hour laws are “often rendered ineffective [at protecting garment workers] when manufacturers subcontract cut and sew work to other companies,” Gamble says, thereby enabling these brands to avoid liability by arguing that they cannot be responsible for what they – as the retailer and not the manufacturer – cannot control. 

While this has been the status quo for the industry for quite some time, change appears to be afoot. Signals are coming by way of new government initiatives and new laws that are being implemented in Europe. As part of a more extensive climate bill, France, for example, passed a law requiring a “carbon label” to be included on garments and textiles to help inform consumers about the impact of their purchases. This law follows closely on the heels of an “anti-waste” law passed in 2020 by the French government that prohibits the destruction of excess inventory and samples, among other things, Gamble notes, saying that, taken together, these developments indicate that “fashion industry regulations and the larger regulatory environment is, indeed, shifting.” 

All the while, the U.S. is seeing a rise in fashion-centric legislation that is worth keeping an eye on. With that in mind, here is a running list of key domestic legislation that industry occupants should be aware of – and we will continue to track developments for each and update accordingly … 

Fashion Environmental Accountability Act of 2025 (AB 405)

Introduced: Feb. 4, 2025 by CA Assembly Member Dawn Addis

Snapshot: The Fashion Environmental Accountability Act of 2025 (AB 405) would require fashion sellers to conduct effective environmental due diligence and publish environmental due diligence reports with the Department of Toxic Substances Control.

Key Provisions: The bill would require companies to: (1) submit an annual Environmental Due Diligence Report, starting July 1, 2027; (2) embed responsible business practices in policies and supply chains; (3) identify, assess, and mitigate environmental and societal risks; (4) establish quantitative greenhouse gas baselines and reduction targets; and (5) require tier 2 suppliers (dyeing, finishing, printing, garment washing) to report wastewater chemical concentrations and water usage by January 1, 2028.

Potential Implications: “Fast fashion has fueled a global crisis,” said Rep Addis. “We cannot stand by while companies profit from depleting natural resources, and using toxic chemicals that pollute and harm our environment and people. The Fashion Environmental Accountability act will hold them accountable.”

Voluntary Sustainable Apparel Labeling Act (H.R. 8978)

Introduced: July 12, 2024 by Reps. María Elvira Salazar (R-FL) and Sean Casten (D-IL)

Snapshot: The Voluntary Sustainable Apparel Labeling Act (H.R. 8978) is being touted as capable of “revolutionizing the way consumers learn about the environmental impact of the clothes they purchase.”

Key Provisions: The legislation will establish a Voluntary Sustainable Apparel Labeling Program at the Environmental Protection Agency (“EPA”). The EPA will consult with the Federal Trade Commission and the Department of Agriculture in implementing the program. Entities that sell apparel (“participants”) will be allowed, but not mandated, to place an apparel sustainability label on their apparel products, as specified under the program. The EPA will specify the information to be included on the label and the method by which the information is verified. Participants will choose whether to attach the label to the product itself or to its packaging.

Potential Implications: The label will include information on the greenhouse gas emissions released during the production, manufacturing, distribution, consumer use, end-of-life reuse, and recycling of an item of apparel. This will help apparel producers showcase the work they’ve done to reduce their carbon footprint while empowering consumers with more information to shop more sustainably. The bill will require civil penalties for any entity that uses the label fraudulently.

The Americas Trade and Investment Act

Introduced: March 6, 2024 by Sens. Bill Cassidy (R-LA) and Michael Bennet (D-CO)

Snapshot: The Americans Trade and Investment Act (“America Act”) is intended to “transform and unleash economic potential in the United States and Latin America through encouraging reshoring and nearshoring industry from China.” The bipartisan bill includes “over $14 billion in incentives for for apparel, footwear, and accessories reuse and recycling, onshoring/reshoring, closing the de minimis loophole, addressing forced labor, and more,” according to its sponsors.

Key Provisions (for the apparel industry): Apparel and textile provisions in the new bill include a 15 percent net income exclusion for businesses engaged in collecting, reselling, reusing, renting, repairing, sorting, pre-processing, and/or recycling apparel, footwear, accessories and home linens; $10 billion in loans and $3 billion in grants for: (i) programs to carry out reuse and recycling; (ii) manufacturing support programs to build new facilities, expand or retrofit existing facilities, and provide low carbon emissions transportation for covered product collection/drop-off or mail-back, sortation, pre-processing, reuse, and/or recycling; and (iii) provision of components and machinery via grants and loans to the businesses to provide components, chemicals/solvents, or machinery necessary for covered product transportation, collection, mail-back, sortation, pre-processing, reuse or recycling.

Additionally, the bill would pave the way for a $1 billion innovation program for research and development related to textile reuse and recycling, and the establishment of a $100 million public education program.

Potential Implications: The bill, if enacted, could serve to chip away at the dominance of fast fashion giants like Shein and Temu, which have been accused of shipping Chinese-made goods directly to consumers in the U.S. and exploiting tax rules in the process. Both companies have come under fire for relying on a trade loophole that enables them to benefit from tax exemptions and less oversight from U.S. Customs when they ship packages with contents that are valued at less than $800. 

“Temu and Shein are building empires around the de minimis loophole in our import rules – dodging import taxes and evading scrutiny on the millions of goods they sell to Americans,” Representative Mike Gallagher, a Wisconsin Republican who chairs the House Select Committee on the Chinese Communist Party, said in a statement this summer.  The America Act directly speaks to that by way of its aim to close the de minimis loophole.

This is a short excerpt from a tracker that is published exclusively for TFL Pro+ subscribers. For access to our up-to-date legislation tracker, inquire today about how to sign up for a Professional subscription.