SACRAMENTO, Calif. (AP) — California Gov. Gavin Newsom on Monday approved what he termed a "nation-leading" law requiring the garment industry to pay workers by the hour instead of for each piece of clothing they produce.

Piece-rate compensation can be used to pay workers below the minimum wage, supporters said.

The bill makes California the first state to eliminate piece work compensation, though there is an exception for worksites covered by collective bargaining agreements, and the first to create liability for companies that subcontract with the garment makers.

"For too long, bad-actor manufacturers have exploited garment workers toiling in unsanitary conditions for as little as $5 an hour," said Democratic Sen. María Elena Durazo. She said her bill will "level the playing field for ethical manufacturers that are doing the right thing."

Employees can still get incentive-based bonuses above their legal wage.

Marissa Nuncio, director of the Garment Worker Center that supported the bill said that the more than 45,000 garment workers in California are often immigrant women. Under the bill, she said, California "will no longer be the sweatshop capital of America."

The California Chamber of Commerce objected that the measure "places enormous burdens on employers in the clothing industry," including those that don't directly oversee the workers but will now be liable for their mistreatment. It predicted the law will put some employers out of business or cause them to move out of California.

The advocacy group Legal Aid at Work, which supported the bill, said the broad liability under the law is necessary to "prevent bad-actor brands from obviating oversight and enforcement by layering contracts."

The measure was among 18 job-related bills signed by Newsom, a Democrat.

He also signed a second measure by Durazo requiring that all employees with disabilities be paid at least minimum wage.

California becomes the 13th state to end a practice that allowed businesses with special licenses to pay people with disabilities subminimum wages, according to the State Council on Developmental Disabilities.

It estimated that 12,000 Californians with disabilities who work in so-called sheltered workshops can be paid as little as 15 cents an hour under a federal policy that dates to 1938.

The Alliance Supporting People with Intellectual and Developmental Disabilities, which opposed the bill, argued that while the sheltered workshops have fallen out of favor, they only employ those who have agreed to work there or whose families have agreed that those are the best option.

Unless the state can develop other options, it said the law "effectively eliminates the prospect for employment for many and, therefore, limits the choices the person may have in front of them."

The law phases out the subminimum wages over three years and by January 1, 2025, makes it illegal to pay an employee with physical or mental disabilities less than the legal minimum wage.