UPDATE 1-American Apparel to dismiss migrants with no papers

* Says about 1,500 workers to lose jobs over next month

* August same-store sales down 20 pct, in line with est (Changes source, adds details)

By Nivedita Bhattacharjee

BANGALORE, Sept 3 (Reuters) - About 1,500 factory workers at American Apparel Inc (APP.A) will lose their jobs over the next month as they could not prove their U.S. immigration status or correct problems with their employment records.

The job cuts come two months after a U.S. federal probe found that about a third of the company's workers in its Los Angeles factory had submitted questionable records and were not authorized to work in the United States [ID:nN30472585]

American Apparel, which has in the past used billboard slogans and T-shirts with "Legalize LA" on them, has made immigration reform a central theme of its corporate message.

"I will continue to fight for immigration reform for the rest of my career," Chief Executive Dov Charney wrote in a letter to employees.

In the letter, written in both English and Spanish, Charney also said the affected employees would be "given priority treatment" for positions as soon as they get their immigration papers in order.

American Apparel's Los Angeles operations, which employ some 4,500 workers, make over 230,000 garments per day in an environment in which workers are paid above minimum wage, enjoy subsidized health care and meals, and take part in free English classes.

On Thursday, the company, known for its colorful T-shirts and other basics worn by urban hipsters, posted a 20 percent fall in August comparable sales, in line with market expectations. (Additional reporting by Ajay Kamalakaran in Bangalore, editing by Will Waterman, Himani Sarkar)