Existing law requires a contract entered into by any state agency for the procurement or laundering of apparel, garments, or corresponding accessories, or the procurement of equipment, materials, or supplies, other than procurement related to a public works contract, to require that a contractor certify that nothing furnished to the state pursuant to the contract has been laundered or produced by certain types of labor. labor, including forced labor, as defined. Existing law makes any person who falsely certifies pursuant to these provisions guilty of a misdemeanor.

This bill would revise the above contracting requirements to also require a contractor to certify, under penalty of perjury, certify that the contract complies with specified requirements relating to human trafficking, including certain prohibitions on contractors, contractor employees, subcontractors, subcontractor employees, and their agents. The bill would revise the definition of forced labor to mean knowingly providing or obtaining labor or services of a person by, among other things, threats of serious harm to, or physical restraint against, that person or another person. The bill would require contractors and subcontractors to notify employees of specified prohibited activities and the actions that may be taken against them for violations. The bill would provide that a contractor is ineligible for, and shall not bid on, or submit a proposal for, a contract under these provisions if the contractor has failed to certify its compliance. The bill would also require a contractor to exercise due diligence in ensuring that its subcontractors comply with those requirements, including requiring each subcontractor to sign a certification under penalty of perjury. certification. By expanding the scope of a crime, the bill would impose a state-mandated local program.

This bill would require, before a contract or subcontract is awarded, a proposed contractor or proposed subcontractor to provide a certification to the contracting officer or contractor, as applicable, that states the contractor or subcontractor has implemented a compliance plan, as specified, and has conducted due diligence that either (1) to the best of the contractors or subcontractors knowledge and belief, certain parties have not engaged in any specified prohibited activities or (2) if the contractor or subcontractor is aware of abuses relating to the specified prohibited activities, then certain parties have taken the appropriate remedial and referral actions. The bill would also require, after the contract or subcontract is awarded and during the performance period of the contract or subcontract, a contractor or subcontractor to provide an annual certification to the contracting officer or contractor, as applicable, that states that the above-mentioned compliance plan has been implemented and due diligence has been conducted regarding the above requirements.

This bill would require a contractor or subcontractor to take specified actions to ensure compliance with the above-described provisions, including requiring the contractor or subcontractor to disclose to the contracting officer and the state agency with oversight information sufficient to identify the nature and extent of a violation of a prohibited activity. The bill would specify certain actions a contractor would be required to take if a contractor, contractor employee, subcontractor, subcontractor employee, or agent violates these provisions or specified provisions, including, among others, notifying its employees of the actions that will be taken against the employee or agent for violations.

Existing law authorizes certain sanctions to be imposed if a contractor knew or should have known that the apparel, garments, corresponding accessories, equipment, materials, or supplies furnished to the state were laundered or produced in violation of specified conditions, including, among others, voiding the contract under which the prohibited apparel, garments, or corresponding accessories, equipment, materials, or supplies were laundered or provided at the option of the state agency and removing the contractor from the bidders list for a period not to exceed 360 days.

This bill would authorize additional sanctions, including, among others, requiring a contractor to remove a contractor employee from the performance of the contract, requiring the contractor to terminate a subcontractor, and suspending contract payments until the contractor has taken appropriate remedial action. The bill would also specify that these requirements govern contracts and subcontracts entered into by a state agency, regardless of place of performance.

Existing law authorizes a contractor to request a hearing before an administrative law judge when sanctions are imposed. Existing law requires the administrative law judge to consider any measures the contractor has taken to ensure compliance with the above-described provisions and authorizes the administrative law judge to waive any or all sanctions if it is determined that the contractor has acted in good faith.

This bill would authorize the administrative law judge to additionally consider mitigating factors and aggravating factors, as specified.

Existing law authorizes a state agency that investigates a complaint against a contractor for violation of the above-described provisions to limit its investigation to evaluating the information provided by the person or entity submitting the complaint and information provided by the contractor.

This bill would authorize the state agency to limit its investigation to credible information. The bill would require the contracting officer, upon receipt of credible information regarding a violation of specified provisions, to promptly notify the state agency with oversight, the agency debarring and suspending official, and law enforcement officials with jurisdiction over the alleged offense, as specified. The bill would authorize the contracting officer to direct the contractor to take specific steps to abate the alleged violation or enforcement of the requirements of its compliance plan.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law requires a contract entered into by any state agency for the procurement or laundering of apparel, garments, or corresponding accessories, or the procurement of equipment, materials, or supplies, other than procurement related to a public works contract, to require that a contractor certify that nothing furnished to the state pursuant to the contract has been laundered or produced by certain types of labor. Existing law makes any person who falsely certifies pursuant to these provisions guilty of a misdemeanor.

This bill would revise the above contracting requirements to also require a contractor to certify, under penalty of perjury, that the contract complies with specified requirements relating to human trafficking, including certain prohibitions on contractors, contractor employees, subcontractors, subcontractor employees, and their agents. The bill would require contractors and subcontractors to notify employees of specified prohibited activities and the actions that may be taken against them for violations. The bill would provide that a contractor is ineligible for, and shall not bid on, or submit a proposal for, a contract under these provisions if the contractor has failed to certify its compliance. The bill would also require a contractor to exercise due diligence in ensuring that its subcontractors comply with those requirements, including requiring each subcontractor to sign a certification under penalty of perjury. By expanding the scope of a crime, the bill would impose a state-mandated local program.

This bill would require, before a contract or subcontract is awarded, a proposed contractor or proposed subcontractor to provide a certification to the contracting officer or contractor, as applicable, that states the contractor or subcontractor has implemented a compliance plan, as specified, and has conducted due diligence that either (1) to the best of the contractors or subcontractors knowledge and belief, certain parties have not engaged in any specified prohibited activities or (2) if the contractor or subcontractor is aware of abuses relating to the specified prohibited activities, then certain parties have taken the appropriate remedial and referral actions. The bill would also require, after the contract or subcontract is awarded and during the performance period of the contract or subcontract, a contractor or subcontractor to provide an annual certification to the contracting officer or contractor, as applicable, that states that the above-mentioned compliance plan has been implemented and due diligence has been conducted regarding the above requirements.

This bill would require a contractor or subcontractor to take specified actions to ensure compliance with the above-described provisions, including requiring the contractor or subcontractor to disclose to the contracting officer and the state agency with oversight information sufficient to identify the nature and extent of a violation of a prohibited activity. The bill would specify certain actions a contractor would be required to take if a contractor, contractor employee, subcontractor, subcontractor employee, or agent violates these provisions or specified provisions, including, among others, notifying its employees of the actions that will be taken against the employee or agent for violations.

Existing law authorizes certain sanctions to be imposed if a contractor knew or should have known that the apparel, garments, corresponding accessories, equipment, materials, or supplies furnished to the state were laundered or produced in violation of specified conditions, including, among others, voiding the contract under which the prohibited apparel, garments, or corresponding accessories, equipment, materials, or supplies were laundered or provided at the option of the state agency and removing the contractor from the bidders list for a period not to exceed 360 days.

This bill would authorize additional sanctions, including, among others, requiring a contractor to remove a contractor employee from the performance of the contract, requiring the contractor to terminate a subcontractor, and suspending contract payments until the contractor has taken appropriate remedial action. The bill would also specify that these requirements govern contracts and subcontracts entered into by a state agency, regardless of place of performance.

Existing law authorizes a contractor to request a hearing before an administrative law judge when sanctions are imposed. Existing law requires the administrative law judge to consider any measures the contractor has taken to ensure compliance with the above-described provisions and authorizes the administrative law judge to waive any or all sanctions if it is determined that the contractor has acted in good faith.

This bill would authorize the administrative law judge to additionally consider mitigating factors and aggravating factors, as specified.

Existing law authorizes a state agency that investigates a complaint against a contractor for violation of the above-described provisions to limit its investigation to evaluating the information provided by the person or entity submitting the complaint and information provided by the contractor.

This bill would authorize the state agency to limit its investigation to credible information. The bill would require the contracting officer, upon receipt of credible information regarding a violation of specified provisions, to promptly notify the state agency with oversight, the agency debarring and suspending official, and law enforcement officials with jurisdiction over the alleged offense, as specified. The bill would authorize the contracting officer to direct the contractor to take specific steps to abate the alleged violation or enforcement of the requirements of its compliance plan.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

SB 1157 (Hurtado) - State contracts: certification process: forced labor and human trafficking

Bill Summary:

SB 1157 revises current state contracting requirements for the procurement or laundering of garments, corresponding accessories, equipment, materials, and supplies to comply with specified human trafficking prohibitions and a detailed series of labor standards, as specified.

Fiscal Impact:

• Total one-time cost of $990,000 over a 24 month period and ongoing annual costs of $825,000 to the Department of General Services (DGS) for limited term and permanent staff to: manage and implement revisions to General Provision documents and the State Contract Manual; address potential increases in contract disputes and lawsuits due to suspended payments and contract cancellations; develop new procurement training content; and to handle other contract enforcement and compliance workload (General Fund).
• Unknown, potentially significant fiscal impact across all impacted departments that utilize garment and equipment procurement or laundering services. Additional workload includes implementing new employment and contracting practices, performing new contract management duties to oversee labor and business practices of contractors and subcontractors, and enforcing compliance with the mandates of this bill.
• Unknown, potentially significant increase in state procurement costs, as contractors generally pass increased business expenses to the state through increased contracting costs. Additionally, DGS notes that to the extent this bill slows down the contract and procurement process thereby jeopardizing time sensitive funding sources or the use of low dollar expeditious acquisition methods, there may be a corresponding fiscal impact to state agencies’ procurement activities.
• Unknown administrative and enforcement workload to the Department of Industrial Relations (DIR).
• Minor costs to the Department of Justice.

Background:

Existing law imposes a series of requirements on state contractors awarded state contracts for the procurement of equipment, material, supplies, and garments. It requires that all state contractors comply with a DIR contractor responsibility program, including a “Sweat Free Code of Conduct.”

Generally, the Sweat Free Code of Conduct requires all contractors and subcontractors to certify, under penalty of perjury, that products supplied to the state are not produced with sweatshop labor or other abusive labor practices. The law is intended to ensure that contractors engaging in public contracts with the state adhere to labor standards that respect human rights and dignity.

The certification must affirm that none of the products supplied were made in conditions that violate those principles. Any person who certifies as true any material matter pursuant to the above requirement that they know to be false is guilty of a misdemeanor. The contracting certification requirements do not apply to credit card purchases of $2,500 or less (this exemption shall not exceed $7,500 per year for each company from which a state agency is purchasing goods).

Further, existing law requires contractors cooperate with state agencies by granting access to their records and premises for compliance checks by state agencies or the DIR, and outlines penalties for contractors found to be in violation, including voiding contracts, imposing fines, and banning from future contracts.

In cases where a contractor is found to have violated these conditions, the Sweat Free Code of Conduct outlines various sanctions including financial penalties of up to $1,000 or twenty percent of the value of the products and/or the contractor or subcontractor being barred from participating in future state contracts. Existing law grants contractors the ability to appeal sanctions, including hearings before an administrative law judge (ALJ). These sanctions are intended to serve as a deterrent against the exploitation of workers and ensure that contractors maintain high labor standards.

Contractors are required to ensure that their subcontractors are in compliance with the Sweat Free Code of Conduct. Any person who certifies as true any material matter pursuant to the above requirements that they know to be false is guilty of a misdemeanor.

Proposed Law:

• Additionally requires a contract by any state agency for the procurement or laundering of apparel, garments, or corresponding accessories, or the procurement of equipment, materials, or supplies, other than procurement for public works contracts, to certify that the contractors, subcontractors, and their agents are prohibited from:
  • Engaging in severe forms of human trafficking during the contract period.
  • Using forced labor in the performance of the contract.
  • Destroying, concealing, confiscating, or otherwise denying access by an employee to the employee’s identify or immigration documents.
  • Using misleading or fraudulent practices during the recruitment of employees or offering of employment, including failing to disclose basic information in a format and language understand by the employee, or making material misrepresentations during the recruitment of employees, as specified.
  • Using recruiters that do not comply with labor laws.
  • Charging employees or potential employees recruitment fees.
  • Failing to provide or pay for the cost of return transportation upon the end of employment for an employee who is not a national of the country where the work is taking place who was brought to that country for the purpose of working on a state contract or an employee who is not a U.S. national and who was brought to the U.S. for the purpose of working on a state contract.
    • Exempts from this prohibition, an employee who is legally permitted to remain in the county where the work is performed and who chooses to remain in the country the work is performed or an employee who is exempted by an authorized official of the contracting agency.
    • Requires a contractor to provide the cost of return transportation for a trafficking victim or a witness in an enforcement action related to human trafficking in a way that does not obstruct the victim services, legal redress, or witness activity.
  • Providing or arranging housing that fails to meet safety standards.
  • If required by law, failing to provide an employment contract, recruitment agreement, or other required work document in writing.
• Requires written documents that are required to be provided to an employee pursuant to an employment contract, recruitment agreement, or other required work document:
  • To be in a language the employee understands.
  • If the employee must relocate to perform the work, provide notification in writing at least five days prior to the employee relocating.
  • Include, but not be limited to, a description of the work, wages, work location, living accommodations, time off, round-trip transportation arrangements, grievance processes, and applicable laws and regulations that prohibit human trafficking.
• Requires a contracting officer to consider the risk that the contract or subcontract will involve services or supplies susceptible to trafficking in persons, and the number of non-U.S. citizens expected to be employed when deciding whether to require work documents in the contract.
• Requires contractors and subcontractors to notify employees of the above prohibited activities established by this bill.
• Provides that a contractor is ineligible for and is prohibited from bidding on or submitting a proposal for a contract for the procurement or laundering of apparel, garments, or corresponding accessories, or the procurement of equipment, materials, or supplies, other than procurement for public works contracts with a state agency if that contractor has failed to certify compliance with the above.
• Requires a contractor to exercise due diligence in ensuring subcontractor compliance.
• Requires a contractor or subcontractor to provide, to the contracting officer before a contract or subcontract is awarded, a certification that states the contractor or subcontractor has implemented a compliance plan and has conducted due diligence, as specified.
• Requires a compliance plan to be appropriate to the size and complexity of the contract and nature and scope of its activities and include, at a minimum: an awareness program to inform employees about specified contractor prohibited activities; a process for employee reporting; a recruitment and wage plan, as specified; a housing plan that ensure the housing meets safety stands if the contractor or subcontractor intends to provide or arrange housing; and procedures to prevent subcontractors and agents from engaging in human trafficking.
• Requires a contractor and subcontractor to:
  • Disclose to the contracting officer and the state agency with oversight information sufficient to identify the nature and extent of a violation of a prohibited activity and the individuals responsible for the conduct.
  • Provide timely and complete responses to state auditors’ and investigators’ requests for documents.
  • Cooperate fully in providing reasonable access to their facilities and staff, inside and outside the state, to allow contracting agencies and other responsible government agencies to conduct audits, investigations, or other actions to ascertain compliance with this section, or any other applicable law or regulation establishing restrictions on trafficking in persons or the use of forced labor.
  • Protect all employees suspected of being victims of or witnesses to prohibited activities before returning to the country from which the employee was recruited.
  • Not prevent or hinder an employee from cooperating fully with government authorities.
• Requires contracts to provide suitable remedies to be imposed on contractors and subcontractors that fail to comply with any of the requirements or prohibitions stated in the above.
• Provides for additional sanctions imposed on contractors contracting with the state who knew or should have known that the apparel, garments, corresponding accessories, equipment, materials, or supplies furnished to the state were laundered or produced in violation of stated conditions, as specified.
• Requires a contractor, subcontractor, or agent who violates the federal Trafficking Victims Protection Act of 2000, Federal Executive Order 136237, or the provisions of this bill to follow and comply with specified notification and disclosure requirements, as well as protect all employees suspected of being victims of or witnesses to prohibited activities from retaliation from employers prior to returning to the county from which the employee was recruited.
• Authorizes an ALJ to consider additional factors.
• Requires, upon receipt of credible information regarding a violation of any of the above, the contracting officer to promptly notify the state agency with oversight, the agency debarring and suspending official, and if appropriate, law enforcement officials with jurisdiction over the alleged offense.
  • Authorizes the contracting officer to direct the contractor to take specific steps to abate the alleged violation or enforce the requirements of its compliance plan.
• Establishes additional definitions.
• Makes technical and conforming changes.

-- END --

SENATE COMMITTEE ON LABOR, PUBLIC EMPLOYMENT AND RETIREMENT

Senator Lola Smallwood-Cuevas, Chair

2023 - 2024 Regular

Bill No: SB 1157 Hearing Date: April 17, 2024

SUBJECT: State contracts: certification process: forced labor and human trafficking

KEY ISSUE

This bill revises existing state contracting requirements to require contractors and subcontractors to certify that contracts comply with specified human trafficking prohibitions and a detailed series of labor standards. Additionally, the bill creates a new requirement for contractors and subcontractors to develop and implement compliance plans, as specified, and expands the list of potential sanctions for violations of these provisions.

ANALYSIS

Existing law:

1. Under the California Occupational Safety and Health Act, assures safe and healthful working conditions for all California workers by authorizing the enforcement of effective standards, assisting and encouraging employers to maintain safe and healthful working conditions, and by providing for research, information, education, training, and enforcement in the field of occupational safety and health. (Labor Code §6300)
2. Requires a contract entered into by any state agency for the procurement or laundering of apparel, garments, or corresponding accessories, or the procurement of equipment, materials, or supplies, other than procurement related to a public works contract, to require that a contractor certify that nothing furnished to the state pursuant to the contract has been laundered or produced by certain types of forced labor, as specified. (Public Contract Code §6108)
3. Specifies that a contractor is required to cooperate fully in providing reasonable access to the contractor’s records, documents, agents, employees, or premises if reasonably required by authorized officials of the contracting agency, the Department of Industrial Relations (DIR), or the Department of Justice (DOJ) to determine the contractor’s compliance, as specified. (Public Contract Code §6108(a)) 
4. Authorizes certain sanctions to be imposed if a contractor knew or should have known that the apparel, garments, corresponding accessories, equipment, materials, or supplies furnished to the state were laundered or produced in violation of specified conditions including, among others, voiding the contract under which the items were laundered or provided at the option of the state agency and removing the contractor from the bidder’s list for a period not to exceed 360 days. (Public Contract Code §6108(b))
5. Requires DIR to establish a contractor responsibility program, including a Sweatfree Code of Conduct, to be signed by all bidders on state contracts and subcontracts, as specified. (Public Contract Code §6108(f))
6. Specifies that any person who certifies as true any material matter pursuant to the above provisions that he or she know to be false is guilty of a misdemeanor. (Public Contract Code §6108(h))
7. Requires employers to establish, implement, and maintain an effective Injury and Illness Prevention Program (IIPP) that must include, among other things, a system for identifying and evaluating workplace hazards. (Labor Code §6401.7)
8. Requires employers, as specified, to establish, implement, and maintain an effective workplace violence prevention plan that includes, among other elements, requirements to maintain incident logs, provide specified trainings, and conduct periodic reviews of the plan. (Labor Code §6401.9)

This bill:

1. Requires every contractor working with a state agency for the procurement or laundering of apparel, garments, or corresponding accessories, or the procurement of equipment, materials, or supplies, other than procurement related to a public works contract, to certify that the contract, among other things, complies with the requirement that contractors, contractor employees, subcontractors, subcontractor employees, and their agents are prohibited from all of the following:
2. Engaging in severe forms of trafficking in persons during the performance period of the contract.
3. Using forced labor in the performance of the contract.
4. Destroying, concealing, confiscating, or otherwise denying access by an employee to the employee’s identity or immigration documents, regardless of the issuing authority.
5. Using misleading or fraudulent practices during the recruitment or hiring of employees, including failing to disclose, in a format and language understood by the employee or potential employee, basic information or making material misrepresentations regarding the key terms and conditions of employment, as specified.
6. Using recruiters that do not comply with state labor laws and the laws of the country that the recruiting takes place.
7. Charging employees or potential employees recruitment fees.
8. Failing to provide or pay for the cost of required return transportation upon the end of employment, as specified.
9. Providing or arranging housing that fails to meet the housing and safety standards of the country where the work is performed.
10. If required by law or contract, failing to provide an employment contract, recruitment agreement, or other required work document in writing, as specified.
11. Requires contractors and subcontractors to notify employees of the prohibited activities described above and the actions that may be taken against them for violations.
12. Provides that the contractor is ineligible for, and shall not bid on, or submit a proposal for, a contract described above if that contractor has failed to certify compliance, as specified.
13. Requires a contractor, before a contract or subcontract is awarded, to provide or obtain from the proposed subcontractor and then provide to the contracting officer a certification that states both of the following: the contractor and/or subcontractor has implemented a compliance plan, as specified; and the contractor and/or subcontractor has conducted due diligence, as specified.
14. Requires the compliance plan to comply with all of the following criteria:
15. The compliance plan shall be appropriate to the size and complexity of the contract and the nature and scope of its activities, as specified.
16. The compliance plan shall include, at minimum, all of the following:
17. An awareness program to inform employees about the prohibited activities described above and the actions that will be taken against them for violations.
18. A process for employees to report activity inconsistent with the above provisions, as specified.
19. A recruitment and wage plan, as specified.
20. If the contractor or subcontractor intends to provide or arrange housing, a housing plan that ensures that the housing meets the housing and safety standards of the country where the work is performed.
21. Procedures to prevent subcontractors and agents at any tier and at any dollar value from engaging in trafficking in persons, including the prohibited activities described above and to monitor, detect, and terminate any agents, subcontracts, or subcontractor employees that have engaged in the prohibited activities.
22. Requires a contractor and subcontractor to comply with all of the following:
23. Disclose to the contracting officer and the state agency with oversight information sufficient to identify the nature and extent of a violation of a prohibited activity described above and the individuals responsible for the conduct.
24. Provide timely and complete responses to state auditors’ and investigators’ requests for documents.
25. Cooperate fully in providing reasonable access to their facilities and staff, inside and outside the state, to allow contracting agencies and other responsible government agencies to conduct audits, investigations, or other actions to ascertain compliance with this section and other anti-human trafficking laws.
26. Protect all employees suspected of being victims of or witnesses to prohibited activities before returning to the country from which the employee was recruited.
27. Not prevent or hinder an employee from cooperating fully with government authorities.
28. Requires contracts to provide suitable remedies, including termination, to be imposed on contractors and subcontractors that fail to comply with the requirements of this bill.
29. Provides that the contract shall specify that the contractor is required to cooperate fully in providing reasonable access to the contractor’s records, documents, agents, employees, or premises if reasonably required by authorized officials of the contracting agency, DIR, or the DOJ to determine the contractor’s compliance with the requirements under this bill.
30. Provides that any contractor contracting with the state who knew or should have known that the apparel, garments, corresponding accessories, equipment, materials, or supplies furnished to the state were laundered or produced in violation of specified conditions when entering into a contract pursuant to the above, may, in addition to existing sanctions, have any or all of the following sanctions applied:
31. The contractor may be required to remove a contractor employee from the performance of the contract.
32. The contractor may be required to terminate a subcontractor.
33. Contract payments may be suspended until the contractor has taken appropriate remedial action.
34. If the state determines contractor noncompliance, there may be a loss of award fee, consistent with the award fee plan, for the performance period the state determined contractor noncompliance.
35. The state may decline to exercise available options under the contract.
36. The contractor may be subject to suspension or debarment.
37. Provides that if a contractor, contractor employee, subcontractor, subcontractor employee, or agent violates specified provisions of the Penal Code, the federal Trafficking Victims Protection Act of 2000, Federal Executive Order 13627, or this bill the contractor must, among other things,
38. Notify its employees and agents of the prohibited activities described above, and the actions that will be taken for violations of this bill, including, but not limited to, removal from the contract, reduction in benefits, or termination of employment.
39. Inform the contracting officer and all appropriate state agencies with oversight information sufficient to identify the nature and extent of a violation of a prohibited activity and the individuals responsible for the conduct, as specified.
40. Provide timely and complete responses to state auditors’ and investigators’ requests for documents.
41. Cooperate fully in providing reasonable access to its facilities and staff, inside and outside the state, to allow contracting agencies and other responsible government agencies to conduct audits, investigations, or other actions to ascertain compliance, as specified.
42. Protect all employees suspected of being victims of or witnesses to prohibited activities from retaliation from employers, as specified and shall not prevent or hinder the ability of these employees from cooperating fully with state authorities.
43. Post the minimum requirements of the compliance plan, as specified.
44. Within 60 days of receiving the contract, provide the compliance plan to the contracting officer.
45. Provides that when imposing the above sanctions, the contracting agency shall notify the contractor of the right to a hearing, if requested, within 15 days of the date of the notice, as specified.
46. Authorizes an administrative law judge, during a hearing requested by a contractor on the imposition of sanctions, to consider both mitigating and aggravating factors, as specified.
47. Requires a contracting officer, upon receipt of credible information regarding a violation described above, to promptly notify, in accordance with agency procedures, the state agency with oversight, the agency debarring and suspending official, and if appropriate, law enforcement officials with jurisdiction over the alleged offense. The contracting officer may direct the contractor to take specific steps to abate the alleged violation or enforce the requirements of its compliance plan.
48. Defines “severe forms of trafficking in persons” as either of the following:
49. Sex trafficking in which a commercial sex act is induced by force, fraud, or coercion, or in which the person induced to perform that act has not attained 18 years of age.
50. 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, peonage, debt bondage, or slavery.
51. Includes various other definitions for words and terms relevant to the bill, as specified.
52. Specifies that requirements set forth in this bill shall govern contracts and subcontracts entered into by a state agency, regardless of place of performance.

COMMENTS

1. Human and Labor Trafficking in California

A series of 2020 reports by the Little Hoover Commission highlighted the obstacles to tracking and preventing labor trafficking in California^[1]. Among the issues identified were the absence of an aggressive state response and a focus on sex trafficking. While the focus on sex trafficking, particularly among minors, is important, relatively few resources are devoted to labor trafficking. The Commission found that while several state agencies play a role in combatting human trafficking, there is no coordinated strategy to target the crime statewide. The state’s ability to “flip the script by proactively and strategically looking for traffickers” requires the effective use of state resources^[2].

This bill furthers efforts to combat human trafficking by directing the state to ensure public funds are not awarded to contractors engaging in severe forms of trafficking.

2. Contracting Requirements:

Existing State Contracting Requirements

Existing law requires state contractor awardees to certify that no apparel, garments, corresponding accessories, equipment, materials, or supplies furnished to the state have been laundered or produced in whole or in part by sweatshop labor, forced labor, convict labor, indentured labor under penal sanction, abusive forms of child labor, or exploitation of children in sweatshop labor.

Contractors must also comply with the Sweatfree Code of Conduct. This Code requires, among other things, that all state contractors and subcontractors certify under penalty of perjury that they do not use any form of forced labor and that they adhere to all appropriate state and federal laws concerning wages, workplace safety, rights to association and assembly, and nondiscrimination standards^[3]. In cases where a contractor violates these conditions, the Sweat Free Code of Conduct outlines various sanctions including financial penalties of up to $1,000 or twenty percent of the value of the products and/or the contractor or subcontractor being barred from participating in future state contracts.

Existing Federal Contracting Requirements

According to the Senate Governmental Relations Committee,

“The United States federal government has long had a policy prohibiting government employees and contractor personnel from engaging in trafficking persons. The efficacy of this policy was strengthened in 2015 when the Federal Acquisition Regulation (FAR) rule, entitled ‘Ending Trafficking in Persons,’ implemented trafficking-related prohibitions for federal contractors and subcontractors.

The FAR rule requires contractors and subcontractors to notify government procurement personnel whenever they receive credible information of human trafficking or violations of the prohibited practices associated with trafficking, and puts parties on notice that federal agencies may impose remedies, up to and including suspension and debarment, for failure to comply with the requirements.

The regulations apply to all contracts and prohibit contractors and subcontractors from engaging in prohibited practices including:

a. Engaging in severe forms of trafficking persons.

b. Procuring commercial sex acts during the performance of the contract.

c. Using forced labor in the performance of the contract.

d. Destroying, concealing, confiscating, or otherwise denying access by an employee to his or her identity or immigration documents.

e. Using misleading or fraudulent recruitment practices.

f. Using recruiters that do not comply with local labor laws.

g. Charging employees recruitment fees.

h. Failing to provide return transportation for employees upon the end of the contract.

i. Providing or arranging housing that fails to meet the host country’s housing and safety standards.

j. If required by law or contract, failing to provide an employment contract in writing.”

SB 1157 Additional Certification Requirements, New Sanctions, and Compliance Plans

This bill expands the enumerated list of prohibitions a contractor must certify to, specifically adding human trafficking and recruitment protections, as well as others. The new certification requires prohibitions against types of labor used (sweatshop, forced, etc.) and labor practices (confiscating identification, recruitment fees, etc.). The expanded list is consistent with existing labor law protections. Contractors are also tasked with exercising due diligence to ensure subcontractors certify compliance.

Additionally, the bill expands the potential sanctions for a contractor who knew or should have known that items furnished to the state were laundered or produced in violation of the conditions specified. Among others, a contractor may now be required to remove a contractor employee from the performance of the contract, terminate a subcontractor, or face suspension of contract payments. If a contractor does know of any abuses, they are required to take appropriate remedial and referral actions, as specified.

Lastly, the bill requires both contractors and subcontractors to implement and maintain a compliance plan to prevent and detect prohibited activities. Before a contract is awarded and work can begin, these plans must be drafted and posted at the workplace and/ or contractor’s website. These posting requirements are consistent with those required for other workplace protection plans.

3. Committee Comments:

The provisions of this bill aim to protect workers by requiring contractors, subcontractors, and their agents to certify that they are not engaging in a series of prohibited actions and that they have implemented a compliance plan. Outside of the compliance plan, this certification only requires contractors to affirm they are following existing law and does not impose any new requirements that are not already illegal. Regardless of certification, a state contractor who violates any of the enumerated prohibitions faces potential sanctions.

The Sweatfree Code of Conduct, described above, requires contractors to certify under penalty of perjury that they comply with all appropriate state and federal laws concerning wages, workplace safety, rights to association and assembly, and nondiscrimination standards. Because all the prohibited actions enumerated in this bill are outlawed in federal and state law, any state contract awardee has already certified their compliance. For example, destroying, concealing, confiscating, or otherwise denying access by an employee to the employee’s identity or immigration documents, regardless of the issuing authority, is included in the expanded certification requirement. Existing federal law, under 18 U.S.C. §1592, prohibits this, thus any state contract awardee has already certified compliance under the Sweatfree Code of Conduct.

Implementing a compliance plan and facing an expanded list of sanctions are the only new provisions of this bill applied to state contractors and subcontractors.

4. Need for this bill?

According to the author, “This bill would revise existing law by requiring that any business that wishes to contract with the state of California complies with updated provisions currently enumerated in Federal regulations in 2016 to better identify and prevent human trafficking and other forms of labor exploitation in company supply chains. If an applicant for a CA contract or a contractor fails to certify that they are taking the enumerated steps to prevent trafficking in their supply chains, they are not eligible to receive a California contract or can lose their procurement contract with the State.”

Additionally, “In 2016 the United Nations in a public forum highlighted the need to look at public procurement to ensure human rights and that ‘The UN Guiding Principles on Business and Human Rights (UNGPs) make clear that states’ duty to protect human rights extends to their purchasing activities.’ California, which is the 5th largest economy in the world, has done little to follow the recommendation to better respond to and prevent labor trafficking. Updating California’s own procurement polices is an important step in combating this crime both globally and in our own backyard.”

5. Proponent Arguments:

The sponsor of the measure, the Sunita Jain Anti-Trafficking Initiative, argues that, “As the fifth largest economy in the world, California has a responsibility to respond to and prevent labor trafficking. An innovative and effective way to address human trafficking in its supply chains is through updating public procurement policies. Procurement accounts for nearly 13% of the GDP in places like the U.S. with recent years showing further increases in the share of public procurement relative to GDP. By ensuring that California will not award it’s public contracts to private companies that are not in compliance with these standards, the state can take major strides towards effectuating change in our own backyard as well as influencing supply chain standards throughout the world.”

“SB 1157 provides clear standards and recommendations to curtail forced labor practices, including employer responsibility for their labor recruitment supply chain and worker access to self-help advocacy. Specifically, the bill provides guidance on what companies must do to contract with California by adopting updated provisions of the Federal Acquisition Regulation (FAR).”

6. Opponent Arguments:

None received.

7. Dual Referral:

This bill was previously heard and passed out of the Senate Committee on Governmental Organization.

8. Prior Legislation:

AB 964 (Ortega, 2023) would have revised the current contracting requirements for any state agency for the procurement or laundering of apparel, garments, or corresponding accessories, or the procurement of equipment, materials, or supplies, other than procurement related to a public works contract, to also require a contractor to certify, under penalty of perjury, that the contract complies with specified requirements relating to human trafficking, including certain prohibitions on contractors, contractor employees, subcontractors, subcontractor employees, and their agents. (Held on the Assembly Appropriations Committee Suspense File)

SB 657 (Steinberg, Chapter 556, Statutes of 2010) enacted the California Transparency in Supply Chains Act to require retail sellers and manufacturers doing business in the state to disclose their efforts to eradicate slavery and human trafficking from their direct supply chains for tangible goods offered for sale, as specified.

SB 1231 (Corbett, 2010) would have made various changes including renaming the code of conduct to the Slave and Sweat Free Code of Conduct, mandating state procurement contracts to include certifications that products are not made with abusive labor, and increasing penalties for non-compliance, as specified. (Vetoed by Governor Schwarzenegger)

SB 578 (Alarcon, Chapter 711, Statutes of 2003) enacted non-sweatshop labor guidelines to state procurement policies to ensure that goods and services purchased by the State of California be produced in workplaces that adhere to minimum standards for protecting workers.

SB 1888 (Hayden, Chapter 891, Statutes of 2000) extended existing law that prohibits state agencies from procuring foreign goods made by forced labor, convict labor, or indentured labor to include goods made by abusive forms of child labor or exploitation of children in sweatshop labor.

AB 2457 (Figueroa, Chapter 1149, Statutes of 1996) required every contract entered into by a state agency for the procurement of equipment, materials, or supplies to specify that no foreign-made equipment, materials, or supplies furnished to the state may be produced by forced labor, convict labor, or indentured labor, as specified.

SUPPORT

Sunita Jain Anti-Trafficking Initiative at Loyola Law School (Sponsor)

California Catholic Conference

Central Valley Justice Coalition

Community Legal Services in East Palo Alto

International Corporate Accountability Roundtable (ICAR)

National Consumers League

Reformed Church of Highland Park Affordable Housing Corp - Still Waters Anti-trafficking

Program

Verité

Waymakers

Worksafe

OPPOSITION

None received

-- END --

1. Little Hoover Commission (September 2020, pages 3-4). Labor Trafficking: Strategies to Uncover this Hidden Crime ↑

2. Little Hoover Commission (September 2020, page 2). Labor Trafficking: Strategies to Uncover this Hidden Crime ↑

3. “Sweatfree Code of Conduct,” Department of Industrial Relations, https://www.dir.ca.gov/sweatfreecode.htm ↑

SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION

Senator Bill Dodd

Chair

2023 - 2024 Regular

Bill No: SB Hearing Date: 4/9/2024

SUBJECT:

DIGEST: This bill revises existing contracting requirements to require compliance with specified human trafficking prohibitions; requires contractors and subcontractors to certify that contracts comply with specified provisions of law under the penalty of perjury, as specified; requires posted compliance plans, as specified; includes due diligence and annual reporting requirements; and specifies required actions for noncompliance violations, as specified.

ANALYSIS:

Existing law:

1. Requires a contract entered into by any state agency for the procurement of laundering of apparel, garments, or corresponding accessories, or the procurement of equipment, materials, or supplies, other than procurement related to a public works contract, to require that a contractor certify that nothing furnished to the state pursuant to the contract has been laundered or produced by certain types of labor, as specified.
2. Makes any person who falsely certifies pursuant to the above provisions guilty of a misdemeanor.
3. Authorizes certain sanctions to be imposed if a contractor knew or should have known that the apparel, garments, corresponding accessories, equipment, materials, or supplies furnished to the state were laundered or produced in violation of specified conditions including, among others, voiding the contract under which the prohibited apparel, garments, or corresponding accessories, equipment, materials, or supplies were laundered or provided at the option of the state agency and removing the contractor from the bidder’s list for a period not to exceed 360 days.
4. Specifies that any person who certifies as true any material matter pursuant to the above requirements that he or she know to be false is guilty of a misdemeanor.
5. Specifies that the above certification requirements do not apply to credit card purchases of goods of $2,500 or less, as specified.

This bill:

1. Requires every contract entered into by an state agency for the procurement or laundering of apparel, garments, or corresponding accessories, or the procurement of equipment, materials, or supplies, other than procurement related to a public works contract, that a contractor certify, under penalty of perjury that the contract, among other things, complies with the requirement that contractors, contractor employees, subcontractors, subcontractor employees, and their agents are prohibited from all of the following:
   
   1. Engaging in severe forms of trafficking in persons during the performance period of the contract.
   2. Using forced labor in the performance of the contract.
   3. Destroying, concealing, confiscating, or otherwise denying access by an employee to the employee’s identity or immigration documents, including passports or driver’s licenses, regardless of the issuing authority.
   4. Using misleading or fraudulent practices during the recruitment of employees or offering of employment, including failing to disclose, in a format and language understood by the employee or potential employee, basic information or making material misrepresentations during the recruitment of employees regarding the key terms and conditions of employment, as specified.
   5. Using recruiters that do not comply with state labor laws and the laws of the county that the recruiting takes place.
   6. Charging employees or potential employees recruitment fees.
   7. Failing to provide or pay for the cost of return transportation upon the end of employment, as specified.
   8. Providing or arranging housing that fails to meet the country where the work is performed housing and safety standards.
   9. If required by law or contract, failing to provide an employment contract, recruitment agreement, or other required work document in writing, as specified.
2. Requires contractors and subcontractors to notify employees of the prohibited activities described above and the actions that may be taken against them for violations.
3. Provides that the contractor is ineligible for, and shall not bid on, or submit a proposal for, a contract described above if that contractor has failed to certify compliance, as specified.
4. Requires a contractor, before a contract or subcontract is awarded, to provide or obtain from the proposed subcontractor and then provide a certification to the contracting officer that states both of the following: the contractor and/or subcontractor has implemented a compliance plan, as specified; and the contractor and/or subcontractor has conducted due diligence, as specified.
5. Requires a contractor, after a contract or subcontract is awarded and during the performance period of the contract or subcontract, to provide or obtain from the subcontractor and then provide an annual certification to the contracting officer that states both of the following: the contractor and/or subcontractor has implemented a compliance plan, as specified; the contractor and/or subcontractor has conducted due diligence, as specified.
6. Requires the compliance plan to comply with all of the following criteria:
   1. The compliance plan shall be appropriate to the size and complexity of the contract and the nature and scope of its activities, including the number of non-United States citizens expected to be employed and the risk that the contract or subcontract will involve services or supplies susceptible to trafficking in persons.
   2. The compliance plan shall include, at minimum, all of the following:
      • 1. An awareness program to inform employees about the prohibited activities described above and the actions that will be taken against the employee for violations.
        2. A process for employees to report, without fear of retaliation, activity inconsistent with the policy prohibiting trafficking in persons, including a means to make available to all employees the hotline phone number of the Global Human Trafficking Hotline and email address, as specified.
        3. A recruitment and wage plan, as specified.
        4. If the contractor or subcontractor intends to provide or arrange housing, a housing plan that ensures that the housing meets the housing and safety standards of the country where the work is performed.
        5. Procedures to prevent subcontractors and agents at any tier and at any dollar value from engaging in tracking in persons, including the prohibited activities described above and to monitor, detect, and terminate any agents, subcontracts, or subcontractor employees that have engaged in prohibited activities.
7. Requires a contractor and subcontractor to comply with all of the following:
   1. Disclose to the contracting officer and the state agency with oversight information sufficient to identify the nature and extent of a violation of a prohibited activity described above and the individuals responsible for the conduct.
   2. Provide timely and complete responses to state auditors’ and investigators’ requests for documents.
   3. Cooperate fully in providing reasonable access to their facilities and staff, inside and outside the state, to allow contracting agencies and other responsible government agencies to conduct audits, investigations, or other actions to ascertain compliance with this bill or any other applicable law or regulation establishing restrictions on trafficking in persons or the use of forced labor.
   4. Protect all employees suspected of being victims of or witnesses to prohibited activities before returning to the country from which the employee was recruited.
   5. Not prevent or hinder an employee from cooperating fully with government authorities.
8. Requires the contracts to provide suitable remedies, including termination, to be imposed on contractors and subcontractors that fail to comply with the requirements of this bill.
9. Provides that any contractor contracting with the state who knew or should have known that the apparel, garments, corresponding accessories, equipment, materials, or supplies furnished to the state were laundered or produced in violation of specified conditions when entering into a contract pursuant to the above, may, have any or all of the following sanctions applied:
   1. The contractor may be required to remove a contractor employee from the performance of the contract.
   2. The contractor may be required to terminate a subcontractor.
   3. Contract payments may be suspended until the contractor has taken appropriate remedial action.
   4. If the state determines contractor noncompliance, there may be a loss of award fee, consistent with the award fee plan, for the performance period the state determined contractor noncompliance.
   5. The state may decline to exercise available options under the contract.
   6. The contractor may be subject to suspension or debarment.
10. Provides that if a contractor, contractor employee, subcontractor, subcontractor employee, or agent violates specified provisions of the Penal Code, the federal Trafficking Victims Protection Act of 2000, Federal Executive Order 13627, or this bill the contractor must do all of the following:
    1. Notify its employees and agents of the prohibited activities described above, and the actions that will be taken against the contractor employee, subcontractor, subcontractor employee, or agent for violations of this bill, including, but not limited to, removal from the contract, reduction in benefits, or termination of employment.
    2. Take appropriate action, including termination against contractor employee, subcontractor, subcontractor employee, or agent that violate the policy described above.
    3. Inform the contracting officer and the state agency with oversight immediately, as specified.
    4. If the allegation may be associated with more than one state contract, inform the contracting officer for the contract with the highest dollar value.
    5. Disclose to the state agency with oversight information sufficient to identify the nature and extent of a violation of a prohibited activity and the individuals responsible for the conduct.
    6. Provide timely and complete responses to state auditors’ and investigators’ requests for documents.
    7. Cooperate fully in providing reasonable access to its facilities and staff, inside and outside the state, to allow contracting agencies and other responsible government agencies to conduct audits, investigations, or other actions to ascertain compliance with this bill, or any other applicable law or regulation establishing restrictions on trafficking in persons or the use of forced labor, as specified.
    8. Protect all employees suspected of being victims of or witnesses to prohibited activities from retaliation from employers, prior to returning to the country from which the employee was recruited, and shall not prevent or hinder the ability of these employees from cooperating fully with state authorities.
    9. Post the minimum requirements of the compliance plan no later than the initiation of contract performance, at the workplace, unless the work is to be performed in the field or not in a fixed location, and on the contractor’s internet website, if applicable and as specified.
    10. Within 60 days of receiving the contract, provide the compliance plan to the contracting officer.
11. Authorizes an administrative law judge, during a hearing requested by a contractor on the imposition of sanctions, to consider both identified factors, as specified.
12. Requires a contracting officer, upon receipt of credible information regarding a violation described above, to promptly notify, in accordance with agency procedures, the state agency with oversight, the agency debarring and suspending official, and if appropriate, law enforcement officials with jurisdiction over the alleged offense. The contracting officer may direct the contractor to take specific steps to abate the alleged violation or enforce the requirements of its compliance plan.
13. Includes various definitions for words and terms relevant to the bill, as specified.
14. Specifies that requirements set forth in this bill shall govern contracts and subcontracts entered into by a state agency, regardless of place of performance.

Background

Author Statement. According to the author’s office, “human trafficking and forced labor have no place in a state like California. As the fifth largest economy in the world, we must do more to protect the workers in California and globally. Annually, the California government procures over $20 billion in goods and services. In passing this bill the State of California will being ensuring our procurement system has the same explicit protection standard as the Federal Government has for the last 8 years to prevent human trafficking. This bill is a major step in creating true preventative measures to address forced labor and exploitation in our progressive state.”

State Procurement and Sweat Free Code of Conduct. Existing law imposes a series of requirements on state contractors awarded state contracts for the procurement of equipment, material, supplies, and garments. It requires that all state contractors comply with a Department of Industrial Relations (DIR) contractor responsibility program, including a “Sweat Free Code of Conduct.”

Generally speaking, existing law requires contractors to certify that products supplied to the state are not produced with sweatshop labor or other abusive labor practices. The law is intended to ensure that contractors engaging in public contracts with the state adhere to labor standards that respect human rights and dignity.

The certification must affirm that none of the products supplied were made in conditions that violate those principles. Any person who certifies as true any material matter pursuant to the above requirement that they know to be false is guilty of a misdemeanor. The contracting certification requirements do not apply to credit card purchases of $2,500 or less (this exemption shall not exceed $7,500 per year for each company from which a state agency is purchasing goods).

Further, existing law requires contractors cooperate with state agencies by granting access to their records and premises for compliance checks by state agencies or the DIR, and outlines penalties for contractors found to be in violation, including voiding contracts, imposing fines, and banning from future contracts.

In cases where a contractor is found to have violated these conditions, the Sweat Free Code of Conduct outlines various sanctions including financial penalties of up to $1,000 or twenty percent of the value of the products and/or the contractor or subcontractor being barred from participating in future state contracts. Existing law grants contractors the ability to appeal sanctions, including hearings before an administrative law judge (ALJ). These sanctions are intended to serve as a deterrent against the exploitation of workers and ensure that contractors maintain high labor standards.

Contractors are required to ensure that their subcontractors are in compliance with the Sweat Free Code of Conduct, under penalty of perjury. Any person who certifies as true any material matter pursuant to the above requirements that they know to be false is guilty of a misdemeanor.

Federal Acquisition Regulation. The United States federal government has long had a policy prohibiting government employees and contractor personnel from engaging in trafficking persons. The efficacy of this policy was strengthened in 2015 when the Federal Acquisition Regulation (FAR) rule, entitled “Ending Trafficking in Persons,” implemented trafficking-related prohibitions for federal contractors and subcontractors.

The FAR requires contractors and subcontractors to notify government procurement personnel whenever they receive credible information of human trafficking or violations of the prohibited practices associated with trafficking, and puts parties on notice that federal agencies may impose remedies, up to and including suspension and debarment, for failure to comply with the requirements.

The regulations apply to all contracts and prohibit contractors and subcontractors from engaging in prohibited practices including:

1. Engaging in severe forms of trafficking persons.
2. Procuring commercial sex acts during the performance of the contract.
3. Using forced labor in the performance of the contract.
4. Destroying, concealing, confiscating, or otherwise denying access by an employee to his or her identity or immigration documents.
5. Using misleading or fraudulent recruitment practices.
6. Using recruiters that do not comply with local labor laws.
7. Charging employees recruitment fees.
8. Failing to provide return transportation for employees upon the end of the contract.
9. Providing or arranging housing that fails to meet the host country housing and safety standards.
10. If required by law or contract, failing to provide an employment contract in writing.

The FAR also requires that U.S. government contracting personnel check the Department of Labor’s “List of Goods Produced by Forced or Indentured Child Labor” when issuing a solicitation for supplies. If the product appears on the list, the contractor is required to certify that it will not supply any end product from countries (subject to certain exceptions) that appear on the list; or to certify that it has made a good faith effort to determine whether forced or indentured labor was used to mine, produce, or manufacture any end product to be furnished under the contract.

If U.S. government personnel have reason to believe that forced or indentured child labor was used to produce an end product, they are required to contact the agency Inspector General, the Attorney General, or the Secretary of the Treasury. Noncompliance with this regulation can lead to termination of the contract, suspension of the contractor, or debarment for up to three years.

Supporters of this bill highlight that since new anti-trafficking measures in federal procurement have been enacted over the previous decade, there were over 180 investigations related to forced labor in federal contracts initiated to better protect workers. Overall, contractors took curative actions to prevent trafficking and protect workers as a result of those investigations. The federal protections resulted in one terminated federal contract over eight years. In the other 179 investigations, terminations were not mentioned, and less severe penalties were imposed, such as cure notices and/or termination of personnel.

Expanding Human Trafficking Protections. This bill expands existing certification requirements for public contracts by requiring that contractors certify, under penalty of perjury, to the existing prohibitions as well as expanding upon existing human trafficking protections. Specifically, the bill identifies severe forms of trafficking in persons, using misleading recruitment practices, charging recruitment fees, and failing to meet safety standards in housing or employment contracts. These new additions broaden the scope of labor abuses covered under law.

This new certification must be more comprehensive, affirming adherence not only to the prohibition of sweatshop labor but also to a detailed series of standards, as specified, aimed at eliminating trafficking and ensuring the fair treatment of workers. A notable aspect of this bill is the introduction of specific requirements for the treatment of workers, including prohibitions against confiscating identity documents and failing to provide or pay for return transportation at the end of employment under certain conditions.

Additionally, this bill requires contractors to implement and maintain a compliance plan to prevent and detect prohibited activities. The plan is required to outline procedures to prevent prohibited labor practices and includes requirements to monitor and remedy any such practices by subcontractors or agents. Contractors must provide annual certifications to the contracting officer, attesting to their compliance with these plans. The plan must be posted at the workplace.

This bill requires contractors to take appropriate remedial and referral actions if abuses are known, and expands the list of sanctions for noncompliance including measures such as the termination of subcontractors, suspension of contract payments, and loss of award fees. Upon receipt of credible information regarding a violation, the contracting officer is required to promptly notify the state agency with oversight, the agency debarring and suspending official, and if appropriate, law enforcement officials with jurisdiction over the alleged offense.

Déjà Vu All Over Again. This bill is significantly similar to AB 964 (Ortega, 2023) from last year. That bill similarly sought to revise the current contracting requirements to also require the contractor to certify, under penalty of perjury, that the contract complies with specified requirements relating to human trafficking, including certain prohibitions on contractors, contractor employees, subcontractors, subcontractor employees, and their agents, as specified.

That bill was held on the Assembly Appropriations Committee Suspense File.

Additionally, SB 1231 (Corbett, 2010) attempted to, among other things, rename the existing code of conduct to the Slave and Sweat Free Code of Conduct, mandating state procurement contracts to include certifications that products are not made with abusive labor. Further, the bill sought to increase penalties for non-compliance, extend oversight to international contractors, and strengthen the enforcement framework by establishing a contractor responsibility program and modifying definitions related to existing crimes.

That bill was vetoed by Governor Arnold Schwarzenegger who wrote in part:

While I am sympathetic to the abusive treatment of workers, I am concerned that this bill would impose additional an unnecessary regulations on small business, as well as increase the complexity of the state procurement process. In addition, I believe this bill could further compromise the business environment in California during difficult times for many businesses in this state.

Suggested Amendments. This bill adds the term under penalty of perjury to the existing Sweat Free Code of Conduct certification requirements. Existing law specifies that any person who certifies as true any material matter pursuant to the Sweat Free Code of Conduct is guilty of a misdemeanor. Currently, contractors certify to a state agency, and if found to have known to be lying, that individual would be subject to misdemeanor prosecution. It is unclear to what extent under penalty of perjury would further the goals of the bill given existing threats to individual liberty for failing to be truthful in the certification process. Therefore, the Committee may wish to amend the bill as follows:

Amendment #1

6108.(a)(1)(A) Every contract entered into by any state agency for the procurement or laundering of apparel, garments, or corresponding accessories, or the procurement of equipment, materials, or supplies, other than procurement related to a public works contract, shall require that a contractor certify, under penalty of perjury, to both of the following:

Additionally, this bill requires contractors and subcontractors, during the performance period of the contract, to annually recertify to the state agency that the contractor or subcontractor has implemented a compliance plan and that the contractor and subcontractor have conducted due diligence, as specified. This is in addition too, and after the contractors and subcontractors have already certified and secured the contract. This annual recertification may prove to be an unnecessary strain on state agencies to annually ensure such things as a compliance plan, when such requirements have already been agreed to on the front end, and contractors are already required to provide cooperation and access to state agencies for the duration of the contract.

Amendment #2

Delete 6108(a)(3) and 6108(a)(5).

Prior/Related Legislation

AB 964 (Ortega, 2023) was substantially similar to this bill, and would have, revised the current contracting requirements for any state agency for the procurement or laundering of apparel, garments, or corresponding accessories, or the procurement of equipment, materials, or supplies, other than procurement related to a public works contract, to also require a contractor to certify, under penalty of perjury, that the contract complies with specified requirements relating to human trafficking, including certain prohibitions on contractors, contractor employees, subcontractors, subcontractor employees, and their agents. (Held on the Assembly Appropriations Committee Suspense File)

SB 1231 (Corbett, 2010) would have made various changes including renaming the code of conduct to the Slave and Sweat Free Code of Conduct, mandating state procurement contracts to include certifications that products are not made with abusive labor, and increasing penalties for non-compliance, as specified. (Vetoed by Governor Schwarzenegger)

SB 828 (Maldonado, Chapter 381, Statutes of 2005) exempted credit card purchases for goods of less than $2,500 from various certification requirements for vendors and contractors who bid for public contracts.

SB 578 (Alarcon, Chapter 711, Statutes of 2003) enacted non-sweatshop labor guidelines to state procurement policies to ensure that goods and services purchased by the State of California be produced in workplaces that adhere to minimum standards for protecting workers.

SB 1888 (Hayden, Chapter 891, Statutes of 2000) extended existing law that prohibits state agencies from procuring foreign goods made by forced labor, convict labor, or indentured labor to include goods made by abusive forms of child labor or exploitation of children in sweatshop labor.

AB 2457 (Figueroa, Chapter 1149, Statutes of 1996) required every contract entered into by a state agency for the procurement of equipment, materials, or supplies to specify that no foreign-made equipment, materials, or supplies furnished to the state may be produced by forced labor, convict labor, or indentured labor, as specified.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT:

California Catholic Conference

Community Legal Services in Palo Alto

International Corporate Accountability Roundtable

National Consumers League

Reformed Church of Highland Park Affordable Housing Corp.

Sunita Jain Anti-Trafficking Initiative

Waymakers

Worksafe

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: Supporters of the bill write that, “[a]ccording to an International Labor Organization study titled ‘Modern Slavery and Forced Labor’ published in 2022, there are nearly 50 million people enslaved on any given day, which translates to almost 1 in 150 people globally. Existing statutory measures have been adopted in California to prevent human trafficking in California’s procurement supply chains, where raw materials and labor often cross international borders. However, these measures adopted in 2007 are outdated. Over the last 10 years, a greater understanding of the more detailed measures necessary to prevent human trafficking globally has been developed, especially with regard to subcontractors and recruitment of migrant workers.”

Further, “[in] 2016, Federal procurement policies were updated and codified to include these exact preventative measures that seek to protect its supply chains from human trafficking, forced labor, and forced commercial sex. It is time for California to do the same.”

DUAL REFERRAL: Senate Governmental Organization Committee & Senate Labor, Public Employment & Retirement Committee