The Government on Combatting Human Trafficking: "We REALLY, REALLY Mean It"

by Sheppard Mullin Richter & Hampton LLP
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[author: Alexander Major]

Since 2005, federal contractors have been on notice that the Government has “zero tolerance” for any federal contractor found to be complicit in aiding human trafficking. For the past seven years, however, that “zero tolerance” has been focused on halting only some aspects of human trafficking, namely involuntary servitude and commercial sex acts. We have previously discussed the human trafficking regulations that are currently in place here. But, as Bob Dylan once said, “The times, they are a changing.” On September 25, 2012, President Obama issued an executive order requiring the Federal Acquisition Regulations (“FAR”) Council to amend the FAR to strengthen protections against human trafficking in persons. As before, the new FAR requirements will apply to solicitations, contracts, and subcontracts for supplies or services (including construction and commercial items) and prohibit contractors and subcontractors from engaging in various trafficking-related activities. However, the trafficking activities identified in the Executive Order have expanded dramatically and will require contractors to plan review, and to revamp as needed, their policies and procedures for the recruitment of personnel and the monitoring of compliance with the expanded requirements.

The regulations to be issued under the new Executive Order now will target companies that:

  • Use misleading recruitment practices, such as hiding or misrepresenting key terms of employment (e.g., wages, benefits, the location of work, living conditions, costs charged to employees, or hazardous work conditions);
  • Charge employees recruitment fees;
  • Restrict employees’ access to identity documents (e.g., passports); and/or
  • Fail to pay the return transportation costs, upon the end of employment, for an employee performing work overseas who is not a national of the country in which the work took place and who does not wish to stay in the country.

Furthermore, the Executive Order directs the FAR to be amended to obligate contracting officers to notify enforcement personnel and officials responsible for suspension and debarment proceedings if they become aware that a contractor or subcontractor has acted in a manner inconsistent with the executive order and, therefore, found to have been complicit in human trafficking as redefined. It also requires that contractors and subcontractors – via a new contract provision - submit to a greater degree of cooperation with any Government audits or investigations into potential non-compliance with trafficking laws and regulations.

For overseas contracts and subcontracts with values in excess of $500,000, contractors and subcontractors now will be required to maintain a compliance plan that includes:

  • A program to inform employees about the anti-trafficking policy and disciplinary actions that will be taken against employees for violations;
  • A process for employees to report trafficking activity;
  • A plan that permits only the use of recruitment companies with trained employees, prohibits charging recruitment fees to employees, and ensures that wages meet host country requirements;
  • A housing plan (if housing is provided) that meets host country requirements; and
  • Procedures to prevent subcontractors from engaging in trafficking and to terminate any subcontractors that have engaged in such activities.

This is a significant change to past FAR human trafficking clauses, which did not mandate a compliance plan but, instead, simply used any existing compliance plan as a mitigating factor to lessen the impact of an alleged violation. See FAR 52-222-50(g). But now, contractors will be required to provide the compliance plan to the contracting officer upon request, and post the relevant contents of the plan at the workplace and on the contractor’s website.

While the Executive Order is effective immediately, the FAR amendments are required to be in place within the next six months and apply to all solicitations issued thereafter. For contractors and subcontractors, especially those working overseas, the next six months is a critical time to measure compliance with the Executive Order and ensure that they are properly situated to meet the expanded requirements.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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