Prohibiting federal contractors from charging workers recruitment fees is a cornerstone of the Federal Acquisition Regulation (FAR) requiring contractors and subcontractors to take specific preventive measures to detect and eliminate forced labor and human trafficking in their supply chains. In December 2018, the U.S. Government amended the FAR to include a comprehensive and clear definition of what constitutes “recruitment fees.”
This final rule follows a lengthy consultation process, and provides an illustrative but non-exhaustive list of the types of “…charges, costs, assessments, or other financial obligations…” covered by the definition.
Given the ingenuity of unscrupulous recruitment intermediaries and collusive employers in finding ways to exploit vulnerable migrant workers, there are undoubtedly current or future recruitment costs not specifically covered in the FAR definition.
Fortunately, consistent with Verité’s approach when working with companies and their supply chains to address forced labor risk, the final definition greatly limits the ability of those seeking to avoid compliance by specifying fees of any type “…that are associated with the recruiting process, regardless of the time, manner, or location of imposition or collection of the fee.” This provision clearly includes recruitment charges or costs incurred by companies that are frequently levied upon workers after they commence work.
Furthermore, the final definition makes it clear that for the purposes of the FAR, whether a charge or cost is a recruitment fee is not influenced by the method of payment or by whom it was collected. Payment in currency, property, wage deductions, concessions, and even illicit payments such as bribes, kickbacks, tips, or tributes, can all be recruitment fees. And whether the recruitment fee is collected by the employer, subcontractors, or third parties, including informal and unlicensed brokers or intermediaries, is irrelevant.
Verité endorses the FAR’s final definition of recruitment fees and looks forward to its effective implementation and robust enforcement. Indeed, we call on trade associations and companies to voluntarily update their codes and standards to align with the FAR definition and put an end to one of the most egregious but insidious practices in global supply chains.
To learn how Verité helps companies ensure employers in their supply chains pay the fees and expenses associated with recruitment, as well as remedy exploited workers, contact Declan Croucher.
For free access to supply chain tools and resources visit the Responsible Sourcing Tool.
The photo included is used solely to illustrate the locations and situations in which risk of forced or child labor is being discussed. The people shown in the photo(s) do not represent any specific person or group of people noted in the text.
Photo Credit: Jianqing Diao/Shutterstock.com