San Francisco's largest garment factory has been shut down after investigations showed that it operated without a license and had refused to pay its 200 immigrant employees for more than three months.

In what is thought to be one of Northern California's worst labour violations, Wins of California, which made clothing for customers such as the US army and air force, Kmart, Sears and Wal-Mart, was found to owe its workers at least $850,000 in back pay.

"This is the most egregious failure to pay wages in Northern California history," said Anne Hipshman, assistant chief counsel for the Division of Labor Standards Enforcement at the state Department of Industrial Relations.

Win's owners, Toha "Jimmy" Quan and his wife, Anna Wong, denied that their employees have gone unpaid since April, as federal and state officials alleged. Wong told the San Francisco Chronicle that: "The workers knew the company had problems, so they held on to their checks to help the company until the company could turn around."

She added that the business had continued to produce clothing without a license out of a sense of duty for the 200 employees, mostly immigrant Chinese women who cannot speak English.

Quan, meanwhile, said that although he knew Wins' license had expired, he believed a license granted to Win Fashion, a separate but now-bankrupt garment factory he and Wong own, was sufficient to cover both companies.

Anne Hipshman, however, said she was amazed by Quan's explanation, explaining that licenses are not granted or renewed unless the garment factory owner can demonstrate knowledge of all the laws.

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