The red tab was introduced in 1936 as means of identifying genuine Levi’s jeans as they hadn’t yet trademarked the arcuate on the back pocket, which meant a lot of competing companies had arcuates featured on their jeans.
Until 1971, the red tabs had ‘LEVI’S’ written in all capital letters, but with the introduction of the Batwing logo the spelling was changed to ‘LeVI’S’. This was the end of an era, but the beginning the vintage ‘Big E’ craze.
Source: After the Denim