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By Jessica Engler 

On March 2, 2015, new federal regulations went into effect which seek to strengthen the protections against human trafficking. A large part of these new regulations, which are updates to the Federal Acquisition Regulation (“FAR”), provide a stronger framework to discourage federal contractor employers from trafficking workers into the country illegally. Since a significant number of federal government contracts are for construction projects, it is imperative that contractors who bid on and win federal contracts be aware of these new regulations.

The United States has long had policies prohibiting government employees and government contractors from engaging in trafficking of persons, and the recent Executive Order, titled “Strengthening Protections Against Trafficking in Persons in Federal Contracts”, and Title XVII of the National Defense Authorization Act for Fiscal Year 2013 have served to heighten the requirements on federal contractors to comply with federal rules against human trafficking. Prior to the implementation of these new rules, federal law prohibited government employees and contractors from participating in trafficking activities including “severe forms of trafficking in persons.” Severe forms of trafficking in persons is defined by section 103 of the Trafficking Victims Protection Act of 2000 to include the recruitment, harboring, transportation, provision, or obtaining of a person for labor or services, through the use of force, fraud, or coercion for the purpose of subjection to involuntary servitude.

Under the new regulations, all contractors and subcontractors (not just those contracting with the federal government) are expressly prohibited from engaging in the following trafficking-related activities:

  • Destroying, concealing, removing, confiscating, or otherwise denying access to an employee’s identity or immigration documents;
  • Failing to provide return transportation for an employee from a foreign country to the country from which the employee was recruited, unless the contractor is exempted or the employee is a victim of trafficking that is seeking redress in his country of employment or is a witness to human trafficking;
  • Solicitation of a person for employment, or offering employment, through materially false or fraudulent pretenses, falsehoods, or promises about that employment. This includes misrepresentations concerning key aspects of employment such as wage payments, fringe benefits, location, and conditions of employment;
  • Use of recruiters who do not comply with local labor laws and charging “recruitment fees” to employees;
  • Providing or arranging housing that fails to meet applicable housing and safety standards; and
  • If required by law or contract, failing to provide an employment contract, recruitment contract, or other required paperwork in writing, in the employee’s native language, prior to departure from the employee’s country of origin.

The regulations impose several additional obligations on federal contractors. For example, these new regulations mandate that such contractors (1) inform their employees and agents of the federal government’s anti-trafficking policies and the penalties for non-compliance, which include removal from contract, reduction in benefits, and termination of employment; and (2) fully cooperate with the federal agencies that are responsible for audits, investigations, or corrective actions related to human trafficking.

Additional rules apply to contractors performing work outside of the United States under a contract valued over $500,000, who must:

  • Create and implement a compliance plan to prevent any prohibited trafficking in persons and implement procedures to prevent any such activities, which must be appropriately designed with regard to the size and complexity of the project, and submitted upon award of the contract and annually thereafter, and published at the contractor’s workplace and website by the start of the contract performance;
  • Certify that, after performing the appropriate due diligence, to the best of the contractor’s knowledge and belief: (1) none of the contractor’s agents, subcontractors, or their agents are engaged in trafficking activities; and (2) if abuses have been found, the contractor has taken the appropriate remedial and referral actions.

Should a violation occur, the contracting officer will consider the compliance plan as a mitigating factor when determining the penalties for the violation.

As stated above, these new requirements apply to all new bids, contracts, and solicitations for federal contracts dated March 2, 2015 onward. Given the heightened new requirements for federal contracts, contractors considering such projects may want to review their current policies and procedures to ensure compliance with the new requirements. Contractors may also consider revising their employee handbooks in light of the new requirements. Consulting a labor and employment or construction attorney may be beneficial in assessing changes to contract labor policies and compliance plans.