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, including forced labor, as defined. Existing law makes any person who falsely certifies pursuant to these provisions guilty of a misdemeanor.

This bill would, for a contract entered into or renewed on or after January 1, 2027, with an estimated value that exceeds $550,000, revise the above contracting requirements to also require a contractor to 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.

This 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. By expanding the scope of a crime, the bill would impose a state-mandated local program.

This bill would, for a contract that has an estimated value that exceeds $550,000, 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.

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, for a contract entered into or renewed on or after January 1, 2027, with an estimated value that exceeds $550,000, 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, for a contract entered into or renewed on or after January 1, 2027, with an estimated value that exceeds $550,000, 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, for a contract entered into or renewed on or after January 1, 2027, with an estimated value that exceeds $550,000, 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, including forced labor, as defined. Existing law makes any person who falsely certifies pursuant to these provisions guilty of a misdemeanor.

This bill would, for a contract entered into or renewed on or after January 1, 2027, with an estimated value that exceeds $550,000, revise the above contracting requirements to also require a contractor to 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.

This 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. By expanding the scope of a crime, the bill would impose a state-mandated local program.

This bill would, for a contract that has an estimated value that exceeds $550,000, 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.

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, for a contract entered into or renewed on or after January 1, 2027, with an estimated value that exceeds $550,000, 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, for a contract entered into or renewed on or after January 1, 2027, with an estimated value that exceeds $550,000, 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, for a contract entered into or renewed on or after January 1, 2027, with an estimated value that exceeds $550,000, 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 regulates various businesses to preserve and regulate competition and prohibit unfair practices, among other purposes. Existing law imposes various business practice restrictions on a food delivery platform, defined as an online business that acts as an intermediary between consumers and multiple food facilities to submit food orders from a consumer to a participating food facility, and to arrange for the delivery of the order from the food facility to the consumer. Existing law prohibits a food delivery platform from arranging the delivery of an order from a food facility without first obtaining an agreement with the food facility expressly authorizing the platform to take orders and deliver meals, as prescribed.

This bill would prohibit a third-party restaurant reservation service, as defined, from listing, advertising, promoting, or selling reservations for a food service establishment through the website, mobile application, or other platform of the third-party restaurant reservation service without a written agreement between that third-party restaurant reservation service and that food service establishment to include reservations at the food service establishment on that website, mobile application, or other platform.

The bill would authorize the Attorney General and a person who suffers harm for a violation of the act to recover specified civil penalties. The bill would also create in the State Treasury the California Restaurant Reservation AntiPiracy Act Fund into which any civil penalty recovered by the Attorney General pursuant to the act would be deposited and would make the moneys in the fund available, upon appropriation by the Legislature, for the purpose of the act.

SENATE COMMITTEE ON

Senator Sabrina Cervantes, Chair

2025 - 2026 Regular Session

AB 1245 (Stefani) - State contracts: certification process: forced labor and human trafficking

Bill Summary:

AB 1245 revises state contracting requirements by mandating that contractors and subcontractors certify compliance with specified human trafficking prohibitions and a detailed series of labor standards. AB 1245 also requires these entities to develop and implement compliance plans, and expand the list of potential sanctions for violations of these provisions.

Fiscal Impact:

The Department of General Services reports total annual costs of approximately $1 million for the first three years of implementation, with ongoing operational costs of $898,000 annually thereafter. This estimate includes:

• A one-time cost of approximately $174,000 for a limited term analyst (24-month duration) to create, update, and manage initial revisions of state contracting regulations and process Budget Change Proposals.
• An ongoing cost of approximately $174,000 for an additional analyst within compliance section of the Office of Small Business and Disabled Veteran Business Enterprise Services branch to handle increased inquiries, complaints, investigations, and referrals.
• An ongoing cost of approximately $724,000 for four additional staff positions within the Acquisitions branch to manage expanded contract workload, handle compliance and complaints, support certification intake, and coordinate investigations.
• Unknown, potentially significant increase in state costs for goods and services. Contractors generally pass any increased costs for certifications and compliance checks onto the state through higher bids and quoted prices. DGS notes the bill may have a cooling effect on competition to the extent contractors choose not to compete for business in California, potentially leading to increased bid costs or more complex contracting processes, negotiations, legal review, and oversight.
• Unknown, potentially significant fiscal impact across all affected state agencies that utilize garment and equipment procurement or laundering services to comply with new contracting mandates (General Fund and various special funds).

Background:

Existing law requires state contractors procuring equipment, materials, supplies, and garments to comply with a Department of Industrial Relations (DIR) responsibility program, which most notably includes a “Sweat Free Code of Conduct.” This code is designed to ensure that public contracts respect human rights and dignity by mandating that contractors and their subcontractors certify, under penalty of perjury, that their products are not produced using sweatshop labor or other abusive practices. This certification applies to most state purchases, though it exempts credit card transactions of $2,500 or less (capped at $7,500 annually per company). Any person who knowingly provides a false certification is guilty of a misdemeanor.

To enforce these high labor standards and deter worker exploitation, contractors must ensure subcontractor compliance and cooperate fully with the DIR and other state agencies by granting access to their records and premises for compliance checks. If a contractor is found to have violated these conditions, the Sweat Free Code of Conduct outlines severe sanctions. These can include voiding active contracts, barring the contractor from participating in future state bids, and imposing financial fines of up to $1,000 or 20 percent of the products' value. However, the law grants contractors the due process to appeal these sanctions, including the right to a hearing before an administrative law judge (ALJ).

Proposed Law:

• Revises contracting requirements, for contracts entered into or renewed on or after January 1, 2027, with an estimated value of $550,000 or more, to require a contractor to certify that the contract complies with specified human trafficking prohibitions. These prohibitions apply to contractors, contractor employees, subcontractors, subcontractor employees, and their agents, as specified.
• Requires contractors and subcontractors to notify employees of these prohibited activities and the disciplinary actions that may be taken against them for violations.
• Requires a contractor to exercise due diligence in ensuring that its subcontractors comply with these requirements, including requiring each subcontractor to sign a compliance certification.
• Requires a proposed contractor, before a contract or subcontract is awarded, to provide the required certification to appropriate contracting officers.
• Requires a contractor or subcontractor to take specified actions to ensure compliance with the law, including disclosing information to the contracting officer and the overseeing state agency sufficient to identify the nature and extent of any violation.
• Specifies certain actions a contractor must take if a contractor, contractor employee, subcontractor, subcontractor employee, or agent violates these provisions.
• Authorizes additional sanctions against non-compliant contractors, including requiring the removal of an employee from the performance of the contract, requiring the termination of a subcontractor, or suspending contract payments until the contractor has taken appropriate remedial action.
• Authorizes an ALJ, during a sanctions hearing, to consider both mitigating and aggravating factors, as specified.
• Requires a contracting officer, upon receipt of credible information regarding a violation, to promptly notify oversight agencies and authorized officials, and allows them to direct the contractor to take specific remedial steps.
• Specifies that requirements set forth in this bill shall govern contracts and subcontracts entered into by a state agency, regardless of place of performance.
• Provides definitions.
• Makes technical and conforming changes.

Related Legislation:

AB 381 (Stefani, 2025) would have revised, for a contract entered into or renewed on or after January 1, 2026, specified 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; 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. AB 381 was held on the Suspense File in this committee.

SB 1157 (Hurtado, 2024) would have revised existing contracting requirements to require compliance with specified human trafficking prohibitions; required contractors and subcontractors to certify that contracts comply with specified provisions of law under the penalty of perjury, as specified; required posted compliance plans, as specified; included due diligence and annual reporting requirements; and specified required actions for noncompliance violations, as specified. SB 1157 was held on the Suspense File in this committee.

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. AB 964 was held on the Suspense File in the Assembly Appropriations Committee.

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SENATE COMMITTEE ON LABOR, PUBLIC EMPLOYMENT AND RETIREMENT

Senator Lola Smallwood-Cuevas, Chair

2025 - 2026 Regular

Bill No: AB 1245 Hearing Date: June 17, 2026

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

KEY ISSUE

This bill revises 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. Prohibits any state agency from entering into a contract with any contractor unless the contractor meets the following requirements, among others:
6. Contractors and subcontractors in California shall comply with all appropriate state laws concerning wages, workplace safety, rights to association and assembly, and nondiscrimination standards as well as appropriate federal laws.
7. Contractors and subcontractors shall maintain a policy of not terminating any employee except for just cause, and employees shall have access to a mediator or to a mediation process to resolve certain workplace disputes that are not regulated by the National Labor Relations Board.
8. Contractors and subcontractors shall ensure that workers are paid, at a minimum, wages and benefits in compliance with applicable local, state, and national laws of the jurisdiction in which the labor, on behalf of the contractor or subcontractor, is performed.
9. All contractors and subcontractors shall comply with the overtime laws and regulations of the country in which their employees are working.
10. There may be no form of forced labor of any kind, including slave labor, prison labor, indentured labor, or bonded labor, including forced overtime hours.
11. No worker may be subjected to any physical, sexual, psychological, or verbal harassment or abuse, including corporal punishment, under any circumstances, including, but not limited to, retaliation for exercising his or her right to free speech and assembly.
12. No worker may be forced to use contraceptives or take pregnancy tests. No worker may be exposed to chemicals, including glues and solvents, that endanger reproductive health.
13. Contractors and bidders shall list the names and addresses of each subcontractor to be utilized in the performance of the contract, and list each manufacturing or other facility or operation of the contractor or subcontractor for performance of the contract. The list, which shall be maintained and updated to show any changes in subcontractors during the term of the contract, shall provide company names, owners or officers, addresses, telephone numbers, e-mail addresses, and the nature of the business association.

(Public Contract Code §6108(g))

1. 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))
2. 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))
3. 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)
4. 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, for a contract entered into or renewed on or after January 1, 2027 and only for contracts with an estimated value that exceeds $550,000, 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 to exercise due diligence in ensuring that its subcontractors comply with the provisions in 1), above, including requiring each subcontractor to sign a certification.
14. 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.
15. Requires the compliance plan to comply with all of the following criteria:
16. The compliance plan shall be appropriate to the size and complexity of the contract and the nature and scope of its activities, as specified.
17. The compliance plan shall include, at minimum, all of the following:
18. An awareness program to inform employees about the prohibited activities described above and the actions that will be taken against them for violations.
19. A process for employees to report activity inconsistent with the above provisions, as specified.
20. A recruitment and wage plan, as specified.
21. 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.
22. 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.
23. Requires a contractor and subcontractor to comply with all of the following:
24. 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.
25. Provide timely and complete responses to state auditors’ and investigators’ requests for documents.
26. 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.
27. Protect all employees suspected of being victims of or witnesses to prohibited activities before returning to the country from which the employee was recruited.
28. Not prevent or hinder an employee from cooperating fully with government authorities.
29. Requires contracts to provide suitable remedies, including termination, to be imposed on contractors and subcontractors that fail to comply with these provisions.
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 these provisions, the contractor shall, among other things, do all of the following:
38. Notify its employees and agents of the prohibited activities described above, and the consequences for violating these provisions, including, but not limited to, removal from the contract, reduction in benefits, or termination of employment.
39. Take appropriate action against a contractor employee, subcontractor, subcontractor employee, or agent that violates these provisions.
40. 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.
41. Provide timely and complete responses to state auditors’ and investigators’ requests for documents.
42. 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.
43. 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.
44. Post the minimum requirements of the compliance plan, as specified.
45. Within 60 days of receiving the contract, provide the compliance plan to the contracting officer.
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 of these provisions, 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 several terms, including:
49. “Forced labor” means knowingly providing or obtaining the labor or services of a person by any of the following:
    1. By threats of serious harm to, or physical restraint against, that person or another person.
    2. By means of any scheme, plan, or pattern intended to cause the person to believe that, if the person did not perform labor or services, that person or another person would suffer serious harm or physical restraint.
    3. By means of the abuse or threatened abuse of law or the legal process.
50. “Severe forms of trafficking in persons” means either of the following:
    1. 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.
    2. 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. “State agency” means any state agency in this state.
52. “Subcontract” means any contract entered into by a subcontractor to furnish supplies or services for performance of a prime contract or a subcontract.
53. “Subcontractor” means any supplier, distributor, vendor, or firm that furnishes supplies or services to or for a prime contractor or another subcontractor.
54. “Subcontractor employee” means an employee of the subcontractor directly engaged in the performance of work under the contract who has other than a minimal impact or involvement in contract performance.
55. Specifies that requirements set forth in this bill shall govern contracts and subcontracts entered into by a state agency, regardless of place of performance.
56. Makes technical and conforming changes.

COMMENTS

1. Background:

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. The Commission also 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]

In 2024, the Legislature passed and governor signed AB 1888 (Arambula, Chapter 614, Statutes of 2024), which created, upon appropriation by the Legislature, the Labor Trafficking Unit within the DOJ to receive labor trafficking reports from law enforcement agencies and other entities, and refer these reports to appropriate agencies for investigation, prosecution, or other remedies. The Legislature has yet to appropriate funds for this office.

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. Any person who knowingly provides a false certification is guilty of a misdemeanor.

Contractors must also comply with the Sweatfree Code of Conduct (Code). 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] The existing law section of this analysis lists all of the contractor and subcontractor requirements contained in the Code. In cases where a contractor violates these conditions, the Code outlines various sanctions including financial penalties of up to $1,000 or twenty percent of the value of the products and/or barring the contractor or subcontractor from participating in future state contracts.

Existing Federal Contractor Requirements

According to the Senate Governmental Organization 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 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.”

AB 1245 Additional Certification Requirements, New Sanctions, and Compliance Plans

AB 1245 would expand the list of prohibitions a contractor must certify compliance with before entering into a contract with any state agency. The expanded list is consistent with existing labor law protections. Additionally, the bill would expand 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 specified conditions. Among other sanctions, 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. Lastly, the bill would require both contractors and subcontractors to implement and maintain a compliance plan to prevent and detect prohibited activities. Before the state awards a contract, these plans must be drafted and posted at the workplace and/or on the contractor’s website. These posting requirements are consistent with those required for other workplace protection plans.

2. 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 federal and state law already outlaw all of the prohibitions enumerated in AB 1245, 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 Code.

3. Need for this bill?

According to the author:

“Data shows that business‑controlled supply chains are the primary drivers of trafficking. The International Labour Organization (ILO) estimates nearly 28 million people are in forced labor, with 86% exploited in the private sector. Migrant workers, women, and children are disproportionately affected due to unfair recruitment practices and subcontracting…

With nearly a $300 billion budget, California is one of the few economies capable of reshaping supply chains through procurement reform. Public procurement represents 13–20% of global GDP. From 2021 to 2023, California spent $56.25 billion on public contracts…

As the 5th largest economy in the world, California needs to adopt specific and detailed guidance for businesses to prevent human trafficking. The goal of this legislation will be to update existing statutory authority in California – which was last updated in 2007- to be consistent with measures that have been required Federally for the last 9 years.

Many companies and vendors which are already in compliance with the Federal regulations also have public contracts with the state. By adopting Federal standards for California’s procurement processes, the state can impact trafficking globally as well as in our own backyard.”

2. Proponent Arguments:

The sponsor of the measure, the Sunita Jain Anti-Trafficking Initiative, argues:

“As the fifth-largest economy in the world, California has both the responsibility and the capacity to reshape supply chains through procurement reform. Public procurement represents approximately 13–20% of global GDP.2 From 2021 to 2023 alone, California spent $56.25 billion on public contracts.

California’s current procurement practices expose the state to significant forced labor risk. Between 2022 and 2023, the State awarded 3,879 contracts for commodities documented with a high risk for labor trafficking, including garments, electronics, agricultural products, and raw minerals. These findings demonstrate that currently California is likely to inadvertently perpetuate trafficking and forced labor by purchasing products in multiple at risk industries without appropriate protections…

AB 1245 builds on California’s existing anti-trafficking framework by:

• Establishing clear definitions of human trafficking, forced labor, recruitment fees, and subcontractors;
• Providing detailed guidance on prohibited conduct in government solicitations and contracts, including fraud, misrepresentation, charging recruitment fees, and failing to provide key employment terms in a worker’s native language;
• Requiring state contractors to certify a compliance plan covering both themselves and their subcontractors; and
• Specifying required actions when potential forced labor, human trafficking, or child labor is identified in a supply chain.

California law currently prohibits forced labor and trafficking but has not provided procurement agencies or contractors with sufficient requirements to prevent these abuses. AB 1245 fills that gap with clear, enforceable standards…

California is preparing to host multiple major global sporting events, including Super Bowls, NBA All-Star Games, the FIFA Men’s World Cup, and the 2028 Olympic Games. Reports confirm that such events dramatically increase demand for goods, services, and short-term labor, creating heightened risks of labor trafficking. Much of this exploitation occurs within the supply chains of the state, cities, counties, and regional agencies responsible for event preparation, yet it often remains hidden until long after the events conclude.

Strengthening procurement safeguards now is essential to ensure that goods used for event preparation—everything from construction materials to electronics to uniforms— are not produced through exploitation.”

3. Opponent Arguments:

None received.

4. Dual Referral:

The Senate Rules Committee referred this bill to the Senate Governmental Organization Committee, where it passed on a 13-0 vote, and the Senate Labor, Public Employment and Retirement Committee.

5. Prior Legislation:

AB 381 (Stefani, 2025) was nearly identical to AB 1245. This bill was held in the Senate Appropriations Committee.

SB 1157 (Hurtado, 2024) was nearly identical to AB 1245. This bill was held in the Senate Appropriations Committee.

AB 1888 (Arambula, Chapter 614, Statutes of 2024) established, upon appropriation by the Legislature, the Labor Trafficking Unit within the DOJ to receive labor trafficking reports from law enforcement agencies and other entities and refer these reports to appropriate agencies for investigation, prosecution, or other remedies.

AB 380 (Arambula, 2023) would have established the Labor Trafficking Unit within DIR’s DLSE. This bill was held in the Senate Appropriations Committee.

AB 235 (B. Rubio, 2023) would have established the Labor Trafficking Unit within the CRD. This bill was held in the Assembly Appropriations Committee.

AB 964 (Ortega, 2023) was nearly identical to AB 381. This bill was held in the Assembly Appropriations Committee.

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. Governor Schwarzenegger vetoed this bill.

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, Loyola Law School (Sponsor)

3strands Global Foundation

Alliance for Community Transformations

Alliance for Community Transit-Los Angeles

Alliance to End Human Trafficking

Asian Americans Advancing Justice - Southern California

Benjamin Hollywood, The

Bet Tzedek

California Chamber of Commerce

California Restaurant Association

California Travel Association

Central Valley Justice Coalition

Coalition to Abolish Slavery & Trafficking

Community Legal Services in East Palo Alto

Greenlining Institute, The

Flour + Water

Freedom Network USA

Freedom United

Hayato Restaurant

Hi Neighbor Hospitality: 7 Adams, Mama, The Madrigal, Trestle, The Vault

Interface Children and Family Services

International Corporate Accountability Roundtable

International Longshore and Warehouse Union, Local 56

Investor Advocates for Social Justice

Jobs to Move America

Los Angeles for a New Economy

Los Angeles Black Worker Center

Los Angeles County Democratic Party

Los Angeles County Electric Truck and Bus Coalition

MassCOSH

Nari, Kin Khao

Northwest Regional Relative and Kinship Providers

OpenTable

Praeveni U.S. Inc.

Public Citizen

Resy

Southern California Coalition for Occupational Safety and Health

Tock

Transparentem

United Auto Workers Region 6

United Food and Commercial Workers Western States Council

University of Maryland Safe Center for Human Trafficking Survivors

Valley Industry and Commerce Association

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 Susan Rubio

Chair

2025 - 2026 Regular

Bill No: Hearing Date: 6/9/2026

SUBJECT:

DIGEST: This bill revises state contracting certification requirements regarding specified human trafficking protections, creates new requirements for contractors to develop and implement compliance plans, and expands the list of possible sanctions for violations of these provisions, as specified.

ANALYSIS:

Existing law:

1. Requires, pursuant to the Sweatfree Code of Conduct, 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, including forced labor, as specified.
2. Makes any person who falsely certifies pursuant to the above provisions guilty of a misdemeanor, as specified, and 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.
3. 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:

1. Revises contracting requirements, for contracts entered into or renewed on or after January 1, 2027, and with an estimated value of $550,000 or more, to also require a contractor to certify that the contract complies with specified requirements relating to human trafficking – including prohibitions on contractors, contractor employees, subcontractors, subcontractor employees, and their agents, as specified.
2. Requires contractors and subcontractors to notify employees of specified prohibited activities and the actions that may be taken against them for violations, as specified.
3. Requires a contractor to practice due diligence in ensuring that its subcontractors comply with specified requirements, including requiring each subcontractor to sign a certification.
4. Requires, before a contract or subcontract is awarded, a proposed contractor to provide certification to the contracting officers as applicable, as specified.
5. Requires a contractor or subcontractor to take specified actions to ensure compliance with the law, 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.
6. Specifies certain actions a contractor can be required to take if a contractor, contractor employee, subcontractor, subcontractor employee, or agent violates those provisions, as specified.
7. Authorizes 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, as specified.
8. Authorizes an administrative law judge to additionally consider mitigating factors and aggravating factors, as specified.
9. Authorizes a state agency to limit its investigation to credible information, as specified.

Background

Author Statement. According to the author’s office, “forced labor and human trafficking remain pervasive in global supply chains, with millions of workers trapped in exploitative conditions. As the world’s fifth-largest economy, California has the power and the responsibility to lead in the fight against human trafficking. By ensuring that no taxpayer money contributes to forced labor, we take a stand for human dignity and justice—not just here in California, but across the globe. Every dollar our state spends should uphold our values, not enable exploitation. AB 1245 strengthens California’s procurement policies by aligning them with federal standards, requiring companies to take proactive steps to prevent trafficking and forced labor in their supply chains. This legislation uses our economic strength to protect the most vulnerable, reinforcing our commitment to human rights and ensuring taxpayer dollars do not support exploitation."

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 DIR contractor responsibility program, including a “Sweat Free Code of Conduct.”

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 to 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 Regulations. 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, for contracts entered into or renewed after January 1, 2027, expands existing certification requirements for public contracts by requiring that contractors certify, 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 essentially identical to three bills in each of the previous legislative years. In 2023, Assemblymember Ortega introduced a version of this bill which was held in the Assembly Appropriations Committee and never reached the Senate. The following year, SB 1157 (Hurtado, 2024) was heard and approved by this Committee – that bill was ultimately held in the Senate Appropriations Committee. Last year, AB 381 (Stefani, 2025) passed off of the Assembly Floor and was approved by this Committee before ultimately being held in the Senate Appropriations Committee.

In January, this bill was gutted of its previous unrelated policy contents and amended into the current form of the bill. This bill is now substantially similar to the three most recent attempts at the same policy that have been held in the respective Appropriations Committees.

Prior/Related Legislation

AB 381 (Stefani, 2025) would have revised, for a contract entered into or renewed on or after January 1, 2026, specified 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; 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. (Held in the Senate Appropriations Committee Suspense File)

SB 1157 (Hurtado, 2024) would have revised existing contracting requirements to require compliance with specified human trafficking prohibitions; required contractors and subcontractors to certify that contracts comply with specified provisions of law under the penalty of perjury, as specified; required posted compliance plans, as specified; included due diligence and annual reporting requirements; and specified required actions for noncompliance violations, as specified. (Held in the Senate Appropriations Committee Suspense File)

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 in the Assembly Appropriations Committee Suspense File)

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT:

Sunita Jain Anti-Trafficking Initiative (Source)

Alliance for Community Transit

Alliance for Community Transformations
Alliance to End Human Trafficking
Asian Americans Advancing Justice - Southern California
Bet Tzedek
Central Valley Justice Coalition
Coalition to Abolish Slavery & Trafficking
Community Legal Services in East Palo Alto
Freedom Network USA
Freedom United

Interface Children and Family Services
International Corporate Accountability Roundtable

International Longshore & Warehouse Union
Investor Advocates for Social Justice
Jobs to Move America

Los Angeles Alliance for A New Economy

Los Angeles Black Worker Center
Los Angeles County Democratic Party
Loyola Law School, the Sunita Jain Anti-trafficking Initiative

Loyola Marymount University

Northwest Regional Relative and Kinship Providers
Praeveni U.S. INC.
Public Citizen

Southern California Coalition for Occupational Safety and Health

The Green Lining Institute
Transparentem

University of Maryland Safe Center for Human Trafficking Survivors
Verité
Waymakers

Western States Council
Worksafe

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: In support of the bill, the Sunita Jain Anti-Trafficking Initiative of Loyola Law School writes, in part, “AB 1245 presents California with a timely opportunity to prevent human trafficking, protect vulnerable workers, and reinforce the state’s global leadership in combating forced labor—while imposing minimal fiscal impact. Businesses, both within the United States and abroad, should not have to compete with unethical producers who undermine working families through the use of forced and trafficked labor.”

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

ASSEMBLY THIRD READING

ATR Bill Id:AB 1245

Author:(Stefani)

As Amended Ver:January 22, 2026

Majority vote

SUMMARY

This bill revises, for a contract entered into or renewed on or after January 1, 2027, specified 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; 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. This bill shall apply only to those contracts that have an estimated value that exceeds $550,000, as specified.

Major Provisions

1. Requires, for a contract entered into or renewed on or after January 1, 2027, 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 housing and safety standards of the county 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 to exercise due diligence in ensuring that its subcontractors comply with the provisions in 1), above, including requiring each subcontractor to sign a certification.
14. Provides that the provisions, as described, only to contracts with an estimated value exceeding $550,000, as specified.
15. 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.
16. Requires the compliance plan to comply with all of the following criteria:
17. The compliance plan shall be appropriate to the size and complexity of the contract and the nature and scope of its activities, as specified.
18. The compliance plan shall include, at a minimum, the following:
19. An awareness program to inform employees about the prohibited activities described above and the actions that will be taken against them for violations.
20. A process for employees to report activity inconsistent with the above provisions, as specified.
21. A recruitment and wage plan, as specified.
22. 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.
23. 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.
24. Requires a contractor and subcontractor to comply with all of the following:
25. 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.
26. Provide timely and complete responses to state auditors' and investigators' requests for documents.
27. 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.
28. Protect all employees suspected of being victims of or witnesses to prohibited activities before returning to the country from which the employee was recruited.
29. Not prevent or hinder an employee from cooperating fully with government authorities.
30. Requires contracts to provide suitable remedies, including termination, to be imposed on contractors and subcontractors that fail to comply with these provisions.
31. Provides, for a contract entered into or renewed on or after January 1, 2027, authorizes 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.
32. 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 complete specified notification and other requirements, as defined.
33. 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

Background.

Labor Trafficking. According to the Attorney General's Website: "Labor trafficking involves the recruitment, harboring, or transportation of a person for labor services, through the use of force, fraud, or coercion. It is modern day slavery. Labor trafficking arises in many situations, including domestic servitude, restaurant work, janitorial work, factory work, migrant agricultural work, and construction. It is often marked by unsanitary and overcrowded living and working conditions, nominal or no pay for work that is done, debt bondage, and document servitude. It occurs in homes and workplaces, and is often perpetrated by traffickers who are the same cultural origin and ethnicity as the victims, which allows the traffickers to use class hierarchy and cultural power to ensure the compliance of their victims. Labor traffickers often tell their victims that they will not be believed if they go to the authorities, that they will be deported from the United States, and that they have nowhere to run. Traffickers teach their victims to trust no one but the traffickers, so victims are often suspicious of genuine offers to help; they often expect that they will have to give something in return."

The intent of AB 1245 is to strengthen efforts to combat human trafficking by ensuring that public funds are not awarded to contractors involved in severe forms of trafficking. The bill aims to protect workers by mandating that contractors, subcontractors, and their agents certify they are not engaging in prohibited actions relating to human trafficking and have implemented a compliance plan. Beyond the compliance plan, this certification simply requires contractors to confirm their adherence to existing laws and does not introduce new obligations beyond what is already illegal. Regardless of certification status, state contractors found violating the specified prohibitions may be subject to defined sanctions.

The bill 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.

State Procurement and Sweatfree Code of Conduct. Existing state law requires a contractor to certify that procured apparel, garments, corresponding accessories, equipment, materials, or supplies are not laundered or produced by sweatshop labor, forced labor, convict labor, indentured labor under penal sanction, abusive forms of child labor, or exploitation of children in sweatshop labor. Existing state law also requires the Department of Industrial Relations to establish a contractor responsibility program, including a Sweatfree Code of Conduct all bidders on state contracts and subcontracts must sign.

Existing Federal Contracting Requirements. In 2012, President Obama signed Executive Order (EO) 13627 directing the administration to adopt regulations strengthening the federal government's zero-tolerance policy on human trafficking by federal contractors and subcontractors in solicitations, contracts, and subcontracts for supplies and services. The EO was ultimately codified in Title 48, Code of Federal Regulations, Subpart 22.17 – Combatting Trafficking in Persons. This bill adds similar provisions to state law, prescribing specific anti-trafficking certification requirements more akin to regulation than statute

According to the Author

According to the author, "Forced labor and human trafficking remain pervasive in global supply chains, with millions of workers trapped in exploitative conditions. As the world's fifth-largest economy, California has the power and the responsibility to lead in the fight against human trafficking. By ensuring that no taxpayer money contributes to forced labor, we take a stand for human dignity and justice—not just here in California, but across the globe. Every dollar our state spends should uphold our values, not enable exploitation. AB 1245 strengthens California's procurement policies by aligning them with federal standards, requiring companies to take proactive steps to prevent trafficking and forced labor in their supply chains. This legislation uses our economic strength to protect the most vulnerable, reinforcing our commitment to human rights and ensuring taxpayer dollars do not support exploitation."

The author states that the bill includes an amendment limiting plan certification requirements to

contracts valued at $550,000 or more, addressing concerns about imposing undue burdens on

small businesses.

Arguments in Support

The sponsors of the measure, the Sunita Jain Anti-Trafficking Initiative, write: "This bill is not only good policy—it is also a cost-efficient measure with far-reaching implications for preventing human trafficking, both within California's supply chains and globally, given the immense size and influence of California's economy. The evidence supporting this legislation is rooted in publicly available data and findings from federal procurement experts, as well as reports like the Department of State's Trafficking in Persons Report (TIP Report), published annually.

California, with its nearly $300 billion budget, is uniquely positioned to lead the fight against forced labor, human trafficking, and child labor. By updating its government procurement policies, the state can ensure that goods purchased by its agencies are free from exploitation. Public procurement accounts for 13–20% of global GDP, and from 2022-23 alone, California spent $18.98 billion on contracts and purchases. California's immense purchasing power provides an unparalleled opportunity to set global standards, compelling companies to scrutinize their supply chains and eliminate exploitative practices. Businesses, both within the United States and abroad, should not have to compete with unethical producers who undermine working families through the use of forced and trafficked labor.

AB 1245 represents a unique opportunity for California to address labor exploitation, protect

vulnerable workers, and establish its global leadership in combating trafficking— all while

incurring minimal fiscal impact."

Arguments in Opposition

None on file

FISCAL COMMENTS

According to the Assembly Committee on Appropriations analysis:

1. Costs likely in the mid-to-high hundreds of thousands of dollars in the first years, but less in subsequent years, to the Department of General Services (DGS) to update the State Contract Manual and related documents and regulations, assist with compliance workload, and address potential increases in contract disputes and lawsuits (General Fund). For its part, DGS anticipates needing six permanent staff positions and one limited-term position, with total costs estimated at over $1 million annually. DGS notes there were more than 9,000 state contracts valued over $550,000 in the 2024-25 fiscal year.
2. Costs of an unknown, but potentially significant, amount across state agencies to administer new contracting practices. Additionally, the new compliance requirements for contractors and subcontractors may result in various state agencies paying more for specified goods (General Fund or special fund).

Generally, contractors are likely to attempt to recover the increased cost of preparing a more complicated bid through the bid price. The new requirement may also deter some contractors from bidding on state contracts. Businesses that regularly bid on state contracts are more likely to comply and try to pass along costs to the state, but new entrants and less frequent bidders are more likely to be deterred from the process. In cases where a foregone contractor would have been the low bidder, the state will pay more, and remaining contractors may face less competitive pressure when bidding on contracts, thus increasing contract costs. Additionally, 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.

VOTES

ASM GOVERNMENTAL ORGANIZATION: 17-0-5

YES: Blanca Rubio, Davies, Bryan, Carrillo, Dixon, Fong, Gabriel, Gipson, Macedo, McKinnor, Nguyen, Pacheco, Ramos, Michelle Rodriguez, Solache, Ta, Wallis

ABS, ABST OR NV: Alvarez, Berman, Sanchez, Soria, Valencia

ASM LABOR AND EMPLOYMENT: 7-0-0

YES: Ortega, Alanis, Chen, Elhawary, Kalra, Lee, Ward

ASM APPROPRIATIONS: 11-0-4

YES: Wicks, Stefani, Calderon, Caloza, Fong, Mark González, Krell, Bauer-Kahan, Pacheco, Pellerin, Solache

ABS, ABST OR NV: Hoover, Dixon, Ta, Tangipa

UPDATED

VERSION: January 22, 2026

CONSULTANT: Eric Johnson / G.O. / (916) 319-2531 FN: 0002253

Date of Hearing: January 22, 2026

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 1245

Author:(Stefani) – As Amended Ver:January 5, 2026

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill requires certain contractors to certify to a state agency that the contract being entered into complies with specified prohibitions to combat human trafficking.

Specifically, this bill:

1. Expands existing state contracting requirements for: (a) procurement or laundering of apparel, garments, or corresponding accessories, or (b) procurement of non-public works related equipment, materials, or supplies, to additionally require a contractor to certify the contract complies with specified prohibitions to combat human trafficking. The contractor must exercise due diligence to ensure subcontractors also comply with these prohibitions. For contracts with an estimated value over $550,000, the contractor must also certify implementation of a compliance plan with procedures to: (a) prevent prohibited activities, and (b) monitor, detect, and terminate a contract with a subcontractor or agent in violation.
2. Adds to the list of sanctions that may be imposed on a contractor that violates the above-described requirements, including suspension of contract payments and loss of award fee.
3. Requires a contractor to make certain disclosures and take certain corrective actions if the contractor or a contractor employee, subcontractor, subcontractor employee, or agent violates the above-described requirements or specified state and federal laws.
4. Applies to contracts entered into or renewed on or after January 1, 2027.

FISCAL EFFECT:

1. Costs likely in the mid-to-high hundreds of thousands of dollars in the first years, but less in subsequent years, to the Department of General Services (DGS) to update the State Contract Manual and related documents and regulations, assist with compliance workload, and address potential increases in contract disputes and lawsuits (General Fund). For its part, DGS anticipates needing six permanent staff positions and one limited-term position, with total costs estimated at over $1 million annually. DGS notes there were more than 9,000 state contracts valued over $550,000 in the 2024-25 fiscal year.
2. Costs of an unknown, but potentially significant, amount across state agencies to administer new contracting practices. Additionally, the new compliance requirements for contractors and subcontractors may result in various state agencies paying more for specified goods (General Fund or special fund).

Generally, contractors are likely to attempt to recover the increased cost of preparing a more complicated bid through the bid price. The new requirement may also deter some contractors from bidding on state contracts. Businesses that regularly bid on state contracts are more likely to comply and try to pass along costs to the state, but new entrants and less frequent bidders are more likely to be deterred from the process. In cases where a foregone contractor would have been the low bidder, the state will pay more, and remaining contractors may face less competitive pressure when bidding on contracts, thus increasing contract costs. Additionally, 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.

COMMENTS:

1. Purpose. According to the author:

Every dollar our state spends should uphold our values, not enable exploitation. AB 1245 strengthens California’s procurement policies by aligning them with federal standards, requiring companies to take proactive steps to prevent trafficking and forced labor in their supply chains.

This bill is sponsored by the Sunita Jain Anti-Trafficking Initiative and supported by various civil rights and workers’ rights groups.

1. Certification Against Human Trafficking. Existing state law requires a contractor to certify that procured apparel, garments, corresponding accessories, equipment, materials, or supplies are not laundered or produced by sweatshop labor, forced labor, convict labor, indentured labor under penal sanction, abusive forms of child labor, or exploitation of children in sweatshop labor. Existing state law also requires the Department of Industrial Relations to establish a contractor responsibility program, including a Sweatfree Code of Conduct all bidders on state contracts and subcontracts must sign. This bill adds another, more detailed certification against forced labor into the state contracting process. If the contract has an estimated value over $550,000, this bill also requires proposed contractors to implement a compliance plan and conduct due diligence to avoid prohibited activities.

In 2012, President Obama signed Executive Order (EO) 13627 directing the administration to adopt regulations strengthening the federal government’s zero-tolerance policy on human trafficking by federal contractors and subcontractors in solicitations, contracts, and subcontracts for supplies and services. The EO was ultimately codified in Title 48, Code of Federal Regulations, Subpart 22.17 – Combatting Trafficking in Persons. This bill adds similar provisions to state law, prescribing specific anti-trafficking certification requirements more akin to regulation than statute.

1. Related Legislation. AB 381 (Stefani) was similar to this bill, except AB 381 would have applied compliance plan provisions to all contracts, not just contracts with an estimated value over $550,000. AB 381 was held on the Senate Appropriations Committee’s suspense file.
2. Prior Legislation. AB 1888 (Arambula), Chapter 614, Statutes of 2024, established, upon appropriation, the Labor Trafficking Unit within the Department of Justice to receive labor trafficking reports from law enforcement agencies and other entities and refer these reports to appropriate agencies for investigation, prosecution, or other remedies.

SB 1157 (Hurtado), of the 2023-24 Legislative Session, was similar to AB 381. SB 1157 was held on the Senate Appropriations Committee’s suspense file.

AB 964 (Ortega), of the 2023-24 Legislative Session, was similar to AB 381. AB 964 was held on this committee’s suspense file.

Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081

Date of Hearing: January 13, 2026

ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT

Liz Ortega, Chair

ABPCA Bill Id:AB 1245 (

Author:Stefani) – As Amended Ver:January 5, 2026

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

SUMMARY: Revises, for contracts entered into or renewed on or after January 1, 2027, 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; expands the list of potential sanctions for violations of these provisions; and creates a new requirement, for contracts with an estimated value of $550,000 or more, that contractors and subcontractors develop and implement compliance plans, as specified Specifically, this bill:

1. Requires, for contracts entered into or renewed on or after January 1, 2027, 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:
   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, regardless of the issuing authority.
   4. 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.
   5. Using recruiters that do not comply with state labor laws and the laws of the country that the recruiting takes place.
   6. Charging employees or potential employees recruitment fees.
   7. Failing to provide or pay for the cost of required return transportation upon the end of employment, as specified.
   8. Providing or arranging housing that fails to meet the housing and safety standards of the country where the work is performed.
   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 in (1) above.
4. Requires a contractor to exercise due diligence in ensuring that its subcontractors comply with the provisions in (1) above.
5. Requires a contractor, before a contract is awarded, to provide to the contracting officer a certification that states both of the following: the contractor has implemented a compliance plan, as specified; and the contractor has conducted due diligence, as specified. Applies this requirement only to contracts that have an estimated value exceeding $550,000.
6. Requires a contractor, before a subcontract is awarded, to obtain from the proposed subcontractor a certification that states both of the following: the subcontractor has implemented a compliance plan, as specified; and the subcontractor has conducted due diligence, as specified. Applies this requirement only to contracts that have an estimated value exceeding $550,000.
7. Requires the compliance plan referenced in (5) and (6) above 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, as specified.
   2. The compliance plan shall include, at minimum, all of the following:
8. An awareness program to inform employees about the prohibited activities described above and the actions that will be taken against them for violations.
9. A process for employees to report activity inconsistent with the provisions of (1) above, as specified.
10. A recruitment and wage plan, as specified.
11. 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.
12. 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.
13. Requires a contractor and subcontractor to comply with all of the following:
14. 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.
15. Provide timely and complete responses to state auditors’ and investigators’ requests for documents.
16. 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.
17. Protect all employees suspected of being victims of or witnesses to prohibited activities before returning to the country from which the employee was recruited.
18. Not prevent or hinder an employee from cooperating fully with government authorities.
19. 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.
20. Requires contracts to 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, Department of Industrial Relations (DIR), or the Department of Justice (DOJ) to determine the contractor’s compliance with the requirements under this bill.
21. 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:
22. The contractor may be required to remove a contractor employee from the performance of the contract.
23. The contractor may be required to terminate a subcontractor.
24. Contract payments may be suspended until the contractor has taken appropriate remedial action.
25. 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.
26. The state may decline to exercise available options under the contract.
27. The contractor may be subject to suspension or debarment.
28. 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 complete specified notification and other requirements, as defined.
29. 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.
30. 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.
31. Specifies that requirements set forth in this bill shall govern contracts and subcontracts entered into by a state agency, regardless of place of performance.
32. Defines various terms, as specified.
33. Makes technical and conforming changes.

EXISTING LAW:

1. Assures, under the California Occupational Safety and Health Act, 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 DIR, or the 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 the 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. Prohibits any state agency from entering into a contract with any contractor unless the contractor meets the specified requirements related to compliance with labor laws and human trafficking prohibitions. Public Contract Code §6108(g).
7. Specifies that any person who certifies as true any material matter pursuant to the above provisions that he or she knows to be false is guilty of a misdemeanor. Public Contract Code § 6108(h).
8. 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.
9. 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.

FISCAL EFFECT: Unknown

COMMENTS: Under current law, state contractor awardees must certify that no apparel, garments, corresponding accessories, equipment, materials, or supplies furnished to the state pursuant to the contract have been laundered or produced in whole or in part by, or with the benefit of, sweatshop labor, forced labor, convict labor, indentured labor under penal sanction, abusive forms of child labor, or exploitation of children in sweatshop labor. (Public Contract Code Section 6108(a)(1).)

Additionally, the state’s Sweatfree Code of Conduct, enforced by the DIR, requires that all state contractors and subcontractors certify under penalty of perjury that they, among other things, do not use any form of forced labor, as well as comply with all applicable state and federal laws. (Public Contract Code Section 6108(f)-(g)).

California has not updated its procurement policies since 2007. In 2015, the federal government enacted stronger anti-trafficking regulations pertaining to federal contractors (see the Assembly Governmental Organization Committee’s analysis for more information). This bill purports to align state procurement standards to those of the federal government.

The bill would require contractors, subcontractors, and their agents to certify that they are not engaging in a series of prohibited actions, all of which are already prohibited by state and/or federal law. The main requirement not covered by existing state law is the compliance plans that subcontractors and contractors must implement for contracts that have an estimated value exceeding $550,000, with the state verifying submission.

Labor Trafficking Unit:

In 2024, the Legislature passed and governor signed AB 1888, which created, upon appropriation by the Legislature, the Labor Trafficking Unit within the DOJ to receive labor trafficking reports from law enforcement agencies and other entities, and refer these reports to appropriate agencies for investigation, prosecution, or other remedies. The Legislature has yet to appropriate funds to stand up this office.

Need for this bill:

The U.S. Department of State’s 2024 Trafficking in Persons Report states that an estimated 27 million people worldwide are exploited for labor, services, and commercial sex.^[1]

The author alleges that California’s current procurement practices could expose the state to forced labor risks. The author cites a Loyola Law School study^[2] showing that, from 2022-2023, the State awarded 3,879 contracts for commodities commonly associated with exploited labor, including, but not limited to garments, electronics, and agricultural products.

According to the author, "California has the power and the responsibility to lead in the fight against human trafficking. By ensuring that no taxpayer money contributes to forced labor, we take a stand for human dignity and justice—not just here in California, but across the globe. Every dollar our state spends should uphold our values, not enable exploitation. This legislation uses our economic strength to protect the most vulnerable. AB 1245 will provide much needed guidance to contractors and subcontractors about action steps to take to address trafficking and further defines human trafficking.”

The author adds that the bill assists underserved and marginalized communities “by providing additional measures to effectively address human trafficking occurring in California’s businesses. Through aligning with federal standards, California would adopt protections intended to prevent abuse against California’s most vulnerable populations. Although California currently prohibits human trafficking, forced labor, and child labor, additional guidance on preventing abuse from occurring is lacking within current legislation. The adoption of updated procurement policies will detail actions companies must take if they identify potential human trafficking, further strengthening protections for underserved communities subjected to trafficking.”

Arguments in Support

The Sunita Jain Anti-Trafficking Initiative at Loyola Law School, sponsor of this measure, states that “AB 1245 builds on California’s existing anti-trafficking framework by:

• Establishing clear definitions of human trafficking, forced labor, recruitment fees, and subcontractors;
• Providing detailed guidance on prohibited conduct in government solicitations and contracts, including fraud, misrepresentation, charging recruitment fees, and failing to provide key employment terms in a worker’s native language;
• Requiring state contractors to certify a compliance plan covering both themselves and their subcontractors; and
• Specifying required actions when potential forced labor, human trafficking, or child labor is identified in a supply chain.

California law currently prohibits forced labor and trafficking but has not provided procurement agencies or contractors with sufficient requirements to prevent these abuses. AB 1245 fills that gap with clear, enforceable standards.”

Arguments in Opposition

None on file.

Prior and Related Legislation

AB 381 (Stefani) of 2025 was similar to this bill but applied its provisions to all contracts rather than those with an estimated value of $550,000 or more. Held in the Senate Appropriations Committee.

AB 1888 (Arambula) Chapter 614, Statutes of 2024 establishes, upon appropriation by the Legislature, the Labor Trafficking Unit within the DOJ to receive labor trafficking reports from law enforcement agencies and other entities and refer these reports to appropriate agencies for investigation, prosecution, or other remedies.

SB 1157 (Hurtado) of 2024 was nearly identical to this bill. Held in the Senate Appropriations Committee.

AB 964 (Ortega) of 2023 was nearly identical to this bill. Held in the Assembly Appropriations Committee.

AB 235 (Rubio) of 2023 would have established the Labor Trafficking Unit within the CRD and required the Labor Trafficking Unit to coordinate with the Labor Enforcement Task Force, the DOJ, and the DLSE to take steps to prevent labor trafficking, receive and investigate complaints alleging labor trafficking, and report specified data. Died in the Assembly Appropriations Committee.

AB 380 (Arambula) of 2023 would have established the Labor Trafficking Unit within the DLSE to receive and investigate complaints alleging labor trafficking and take steps to prevent labor trafficking. Died in the Senate Appropriations Committee.

AB 1820 (Arambula) of 2022 would have established the Labor Trafficking Unit within the Division of Labor Standards Enforcement (DLSE) to coordinate with the Labor Enforcement Task Force, the Criminal Investigation Unit, the DOJ, and the Civil Rights Department (CRD) to investigate and prosecute complaints alleging labor trafficking, and report specified data. Vetoed by Governor Newsom.

SB 657 (Steinberg), Chapter 556, Statutes of 2010 enacted the California Transparency in Supply Chains Act to provide consumers with new and easily accessible information made available by specified large retailers and manufacturers about these businesses’ voluntary efforts to try to eradicate slavery and human trafficking that could inadvertently be in their product supply chains.

SB 1231 (Corbett) of 2010 would have made various substantive and clarifying changes to existing provisions of the Public Contract Code related to “sweatfree” procurement policy and code of conduct. Vetoed by Governor Schwarzenegger.

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

SB 1888 (Hayden), Chapter 891, Statutes of 2000 extended the existing law prohibiting state agencies from procuring foreign goods made by forced labor, convict labor, of 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 under penal sanction.

REGISTERED SUPPORT / OPPOSITION:

Support

Sunita Jain Anti-Trafficking Initiative, Loyola Law School (Sponsor)
Alliance for Community Transformations, d.b.a. Valley Crisis Center
Alliance to End Human Trafficking
Asian Americans Advancing Justice - Southern California
Bet Tzedek
Central Valley Justice Coalition
Coalition to Abolish Slavery and Trafficking
Community Legal Services in East Palo Alto
Freedom Network USA
International Corporate Accountability Roundtable (ICAR)
Investor Advocates for Social Justice
Jobs to Move America
Praeveni U.S. INC.
Public Citizen
Transparentem
Verité
Waymakers

Opposition

None on file.

Analysis Prepared by: Erin Hickey / L. & E. /

1. US Department of State. (2024) “Trafficking in Persons Report 2024.” https://www.state.gov/wp-content/uploads/2025/02/TIP-Report-2024_Introduction_V10_508-accessible_2.13.2025.pdf) ↑

2. Loyola Law School, Loyola Marymount University. (2024) “Goods At High Risk For Forced Labor That Are Procured Through California Public Contract.” https://www.lls.edu/media/loyolalawschool/academics/clinicsexperientiallearning/sji/publicationsandreports/FACTSHEET%20-%20Goods%20at%20High%20Risk%20for%20Forced%20Labor%20in%20CA%20State%20Contracts.pdf ↑

Date of Hearing: January 7, 2026

ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION

Blanca Rubio, Chair

ABPCA Bill Id:AB 1245 (

Author:Stefani) – As Amended Ver:January 5, 2026

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

SUMMARY: This bill revises, for a contract entered into or renewed on or after January 1, 2027, specified 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; 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. The bill provides that specified provisions (compliance plan) apply only to contracts with an estimated value exceeding $550,000, as specified. Specifically, this bill:

1. Requires, for a contract entered into or renewed on or after January 1, 2027, 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 to exercise due diligence in ensuring that its subcontractors comply with the provisions in 1), above, including requiring each subcontractor to sign a certification.
14. Provides that specified provisions (compliance plan), as described below apply only to contracts with an estimated value exceeding $550,000, as specified.
15. 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.
16. Requires the compliance plan to comply with all of the following criteria:
17. The compliance plan shall be appropriate to the size and complexity of the contract and the nature and scope of its activities, as specified.
18. The compliance plan shall include, at minimum, all of the following:
19. An awareness program to inform employees about the prohibited activities described above and the actions that will be taken against them for violations.
20. A process for employees to report activity inconsistent with the above provisions, as specified.
21. A recruitment and wage plan, as specified.
22. 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.
23. 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.
24. Requires a contractor and subcontractor to comply with all of the following:
25. 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.
26. Provide timely and complete responses to state auditors’ and investigators’ requests for documents.
27. 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.
28. Protect all employees suspected of being victims of or witnesses to prohibited activities before returning to the country from which the employee was recruited.
29. Not prevent or hinder an employee from cooperating fully with government authorities.
30. Requires contracts to provide suitable remedies, including termination, to be imposed on contractors and subcontractors that fail to comply with these provisions.
31. Provides, for a contract entered into or renewed on or after January 1, 2027, 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.
32. 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 complete specified notification and other requirements, as defined.
33. 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.
34. Authorizes, for a contract entered into or renewed on or after January 1, 2027, 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.
35. Provides, for a contract entered into or renewed on or after January 1, 2027, authorize the state agency to limit its investigation to credible information.
36. Specifies that requirements set forth in this bill shall govern contracts and subcontracts entered into by a state agency, regardless of place of performance.
37. Includes various other definitions, as specified.
38. Makes technical and conforming changes.

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) Prohibits any state agency from entering into a contract with any contractor unless the contractor meets the following requirements, among others:

a) Contractors and subcontractors in California shall comply with all appropriate state laws

concerning wages, workplace safety, rights to association and assembly, and nondiscrimination standards as well as appropriate federal laws.

b) Contractors and subcontractors shall maintain a policy of not terminating any employee

except for just cause, and employees shall have access to a mediator or to a mediation process to resolve certain workplace disputes that are not regulated by the National Labor

Relations Board.

c) Contractors and subcontractors shall ensure that workers are paid, at a minimum, wages

and benefits in compliance with applicable local, state, and national laws of the jurisdiction in which the labor, on behalf of the contractor or subcontractor, is performed.

d) All contractors and subcontractors shall comply with the overtime laws and regulations of

the country in which their employees are working.

e) There may be no form of forced labor of any kind, including slave labor, prison labor, indentured labor, or bonded labor, including forced overtime hours.

f) No worker may be subjected to any physical, sexual, psychological, or verbal harassment

or abuse, including corporal punishment, under any circumstances, including, but not limited to, retaliation for exercising his or her right to free speech and assembly.

g) No worker may be forced to use contraceptives or take pregnancy tests. No worker may be exposed to chemicals, including glues and solvents, that endanger reproductive health.

h) Contractors and bidders shall list the names and addresses of each subcontractor to be

utilized in the performance of the contract, and list each manufacturing or other facility or operation of the contractor or subcontractor for performance of the contract. The list, which shall be maintained and updated to show any changes in subcontractors during the term of the contract, shall provide company names, owners or officers, addresses, telephone numbers, e-mail addresses, and the nature of the business association. (Public Contract Code §6108(g))

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 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))

8) 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)

9) 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)

FISCAL EFFECT: Unknown

COMMENTS:

Purpose of the bill. According to the author, "Forced labor and human trafficking remain pervasive in global supply chains, with millions of workers trapped in exploitative conditions. As the world’s fifth-largest economy, California has the power and the responsibility to lead in the fight against human trafficking. By ensuring that no taxpayer money contributes to forced labor, we take a stand for human dignity and justice—not just here in California, but across the globe. Every dollar our state spends should uphold our values, not enable exploitation. AB 1245 strengthens California’s procurement policies by aligning them with federal standards, requiring companies to take proactive steps to prevent trafficking and forced labor in their supply chains. This legislation uses our economic strength to protect the most vulnerable, reinforcing our commitment to human rights and ensuring taxpayer dollars do not support exploitation."

The author states that the bill includes an amendment limiting plan certification requirements to contracts valued at $550,000 or more, addressing concerns about imposing undue burdens on small businesses.

Background.

Labor Trafficking. According to the Attorney General’s Website: “Labor trafficking involves the recruitment, harboring, or transportation of a person for labor services, through the use of force, fraud, or coercion. It is modern day slavery. Labor trafficking arises in many situations, including domestic servitude, restaurant work, janitorial work, factory work, migrant agricultural work, and construction. It is often marked by unsanitary and overcrowded living and working conditions, nominal or no pay for work that is done, debt bondage, and document servitude. It occurs in homes and workplaces, and is often perpetrated by traffickers who are the same cultural origin and ethnicity as the victims, which allows the traffickers to use class hierarchy and cultural power to ensure the compliance of their victims. Labor traffickers often tell their victims that they will not be believed if they go to the authorities, that they will be deported from the United States, and that they have nowhere to run. Traffickers teach their victims to trust no one but the traffickers, so victims are often suspicious of genuine offers to help; they often expect that they will have to give something in return.” (What is Human Trafficking? State of California Department of Justice, available at: https://oag.ca.gov/human-trafficking/what-is

The intent of AB 1245 is to strengthen efforts to combat human trafficking by ensuring that public funds are not awarded to contractors involved in severe forms of trafficking. The bill aims to protect workers by mandating that contractors, subcontractors, and their agents certify they are not engaging in prohibited actions relating to human trafficking and have implemented a compliance plan. Beyond the compliance plan, this certification simply requires contractors to confirm their adherence to existing laws and does not introduce new obligations beyond what is already illegal. Regardless of certification status, state contractors found violating the specified prohibitions may be subject to defined sanctions.

The bill 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.

Little Hoover Commission Report. In 2020 the Little Hoover Commission (LHC) released three reports reviewing the state’s response to labor trafficking. 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 LHC believes California must take stronger actions to detect this crime, help victims, and prosecute perpetrators. The LHC 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. (Labor Trafficking: Strategies to Uncover this Hidden Crime, LHC (September 2020). https://lhc.ca.gov/report/uncovering-trafficking/

State Procurement and Sweatfree 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 “Sweatfree Code of Conduct.” Although originally created for apparel and related products, the Sweatfree Code of Conduct applies to state procurement of all equipment, materials, and supplies, including vehicles and electronics.

The Sweatfree Code of Conduct has several key components aimed at promoting ethical labor practices among state contractors and subcontractors. These include:

1. Prohibition of Forced Labor: Contractors must certify that they do not use any form of forced or involuntary labor.
2. Fair Wages: Compliance with all applicable state and federal wage laws is required to ensure fair compensation for workers.
3. Workplace Safety: Adherence to health and safety standards to protect workers from unsafe working conditions.
4. Rights to Association and Assembly: Recognition and respect for workers' rights to freely associate, organize, and bargain collectively.
5. Nondiscrimination: Commitment to nondiscrimination in hiring and employment practices, ensuring equal opportunities for all individuals.

These components work together to uphold human rights, promote fair treatment, and foster ethical workplace environments.

The Sweatfree Code of Conduct requires contractors and subcontractors to certify, under penalty of perjury, that they do not use forced labor and comply with laws related to wages, workplace safety, nondiscrimination, and workers' rights. 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).

Furthermore, existing law requires contractors to cooperate with state agencies by granting access to their records and premises for compliance checks conducted by state agencies or the Department of Industrial Relations (DIR). It also outlines penalties for contractors found in violation, which include voiding contracts, imposing fines, and disqualification from future contracts.

In cases where a contractor is found to have violated these conditions, the Sweatfree 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 Sweatfree 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.

Existing Federal Contracting Requirements. The United States federal government has long had a policy prohibiting government employees and contractor personnel from engaging in trafficking persons. This policy was strengthened in 2015 when the Federal Acquisition Regulation (FAR) rule (FAR 52.222-50), entitled “Ending Trafficking in Persons” that implemented trafficking-related prohibitions for federal contractors and subcontractors, including requirements for compliance plans and certifications.

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:

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’s housing and safety standards.
10. If required by law or contract, failing to provide an employment contract in writing.

This bill would add similar provisions to state law, prescribing specific anti-trafficking certification requirements more akin to regulation than statute.

Double Referral. The Assembly Rules Committee also referred this bill to the Assembly Committee on Labor and Employment.

In support. The sponsors of the measure, the Sunita Jain Anti-Trafficking Initiative, write: “This bill is not only good policy—it is also a cost-efficient measure with far-reaching implications for preventing human trafficking, both within California’s supply chains and globally, given the immense size and influence of California’s economy. The evidence supporting this legislation is rooted in publicly available data and findings from federal procurement experts, as well as reports like the Department of State’s Trafficking in Persons Report (TIP Report), published annually.

California, with its nearly $300 billion budget, is uniquely positioned to lead the fight against forced labor, human trafficking, and child labor. By updating its government procurement policies, the state can ensure that goods purchased by its agencies are free from exploitation. Public procurement accounts for 13–20% of global GDP, and from 2022-23 alone, California spent $18.98 billion on contracts and purchases. California’s immense purchasing power provides an unparalleled opportunity to set global standards, compelling companies to scrutinize their supply chains and eliminate exploitative practices. Businesses, both within the United States and abroad, should not have to compete with unethical producers who undermine working families through the use of forced and trafficked labor.

AB 1245 represents a unique opportunity for California to address labor exploitation, protect

vulnerable workers, and establish its global leadership in combating trafficking— all while

incurring minimal fiscal impact.”

Prior legislation. AB 381 (Stefani) of 2025. This bill would have revised, for a contract entered into or renewed on or after January 1, 2026, specified 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; 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. (Held on the Senate Appropriations Committee Suspense File)

SB 1157 (Hurtado) of 2024. This bill would have revised existing contracting requirements to require compliance with specified human trafficking prohibitions; required contractors and subcontractors to certify that contracts comply with specified provisions of law under the penalty of perjury, as specified; required posted compliance plans, as specified; included due diligence and annual reporting requirements; and specified required actions for noncompliance violations, as specified. (Held on the Senate Appropriations Committee Suspense File)

AB 964 (Ortega) of 2023. This bill 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)

AB 235 (Rubio) of 2023. Establishes the Labor Trafficking Unit (LTU) within the Civil Rights Department and requires the LTU to coordinate with the Labor Enforcement Task Force, the DOJ, and the Division of Labor Standards Enforcement. (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) of 2010. This bill would have made various changes including renaming the code of conduct to the Slave and Sweatfree 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.

REGISTERED SUPPORT / OPPOSITION:

Support

Alliance for Community Transformations

Asian Americans Advancing Justice-Southern California

Bet Tzedek

Central Valley Justice Coalition

Coalition to Abolish Slavery & Trafficking (CAST)

Community Legal Services in East Palo Alto

Freedom United

International Corporate Accountability Roundtable (ICAR)

Jobs to Move America

Praeveni U.S. Inc.

Public Citizen

Sunita Jain Anti-Trafficking Initiative

Verite

Waymakers

Opposition

None on file

Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531