II 

116TH CONGRESS 

2D SESSION S. 4241 

To require certain businesses to disclose the use of forced labor in their 

direct supply chain, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 21, 2020 

Mr. HAWLEY introduced the following bill; which was read twice and referred 

to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To require certain businesses to disclose the use of forced 

labor in their direct supply chain, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Slave-Free Business 

5 Certification Act of 2020’’. 

6 SEC. 2. REQUIRED REPORTING ON USE OF FORCED LABOR 

7 FROM COVERED BUSINESS ENTITIES. 

8 (a) DEFINITIONS.—In this section: 

9 (1) COVERED BUSINESS ENTITY.—The term 

10 ‘‘covered business entity’’ means any issuer, as that 


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1 term is defined in section 2(a) of the Securities Act 

2 of 1933 (15 U.S.C. 77b(a)), that has annual, world3 wide gross receipts that exceed $500,000,000. 

4 (2) FORCED LABOR.—The term ‘‘forced labor’’ 

5 means any labor practice or human trafficking activ6 ity in violation of national and international stand7 ards, including— 

8 (A) International Labor Organization Con9 vention No. 182; 

10 (B) the Trafficking Victims Protection Act 

11 of 2000 (22 U.S.C. 7101 et seq.); and 

12 (C) any act that would violate the criminal 

13 provisions related to slavery and human traf14 ficking under chapter 77 of title 18, United 

15 States Code, if the act had been committed 

16 within the jurisdiction of the United States. 

17 (3) GROSS RECEIPTS.—The term ‘‘gross re18 ceipts’’— 

19 (A) means the gross amount, including 

20 cash and the fair market value of other prop21 erty or services received, gained in a transaction 

22 that produces business income from— 

23 (i) the sale or exchange of property; 

24 (ii) the performance of services; or 


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1 (iii) the use of property or capital; 

2 and 

3 (B) does not include— 

4 (i) repayment, maturity, or redemp5 tion of the principal of a— 

6 (I) loan; 

7 (II) bond; 

8 (III) mutual fund; 

9 (IV) certificate of deposit; or 

10 (V) similar marketable instru11 ment; 

12 (ii) proceeds from— 

13 (I) the issuance of a company’s 

14 own stock; or 

15 (II) the sale of treasury stock; 

16 (iii) amounts received as the result of 

17 litigation, including damages; 

18 (iv) property acquired by an agent on 

19 behalf of another party; 

20 (v) Federal, State, or local tax re21 funds or other tax benefit recoveries; 

22 (vi) certain contributions to capital; 

23 (vii) income from discharge of indebt24 edness; or 


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1 (viii) amounts realized from exchanges 

2 of inventory that are not recognized under 

3 the Internal Revenue Code of 1986. 

4 (4) ON-SITE SERVICE.—The term ‘‘on-site serv5 ice’’ means any service work provided on the site of 

6 a covered business entity, including food service 

7 work and catering services. 

8 (5) ON-SITE SERVICE PROVIDER.—The term 

9 ‘‘on-site service provider’’ means any entity that pro10 vides workers who perform, collectively, a total of 

11 not less than 30 hours per week of on-site services 

12 for a covered business entity. 

13 (6) SECRETARY.—The term ‘‘Secretary’’ means 

14 the Secretary of Labor. 

15 (b) AUDIT AND REPORTING REQUIREMENTS.— 

16 (1) IN GENERAL.—Not later than 1 year after 

17 the date of enactment of this Act, and every year 

18 thereafter, each covered business entity shall— 

19 (A) conduct an audit of its supply chain, 

20 pursuant to the requirements of section 3, to 

21 investigate the presence or use of forced labor 

22 by the covered business entity or its suppliers, 

23 including by direct suppliers, secondary sup24 pliers, and on-site service providers of the cov25 ered business entity; 


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1 (B) submit a report to the Secretary con2 taining the information described in paragraph 

3 (2) on the results of such audit and efforts of 

4 the covered business entity to eradicate forced 

5 labor from the supply chain and on-site services 

6 of the covered business entity; and 

7 (C)(i) publish the report described in sub8 paragraph (B) on the public website of the cov9 ered business entity, and provide a conspicuous 

10 and easily understood link on the homepage of 

11 the website that leads to the report; or 

12 (ii) in the case of a covered business entity 

13 that does not have a public website, provide the 

14 report in written form to any consumer of the 

15 covered business entity not later than 30 days 

16 after the consumer submits a request for the 

17 report. 

18 (2) REQUIRED REPORT CONTENTS.—Each re19 port required under paragraph (1)(B) shall contain, 

20 at a minimum— 

21 (A) a disclosure of the covered business en22 tity’s policies to prevent the use of forced labor 

23 by the covered business entity, its direct sup24 pliers, and its on-site service providers; 


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1 (B) a disclosure of what policies or proce2 dures, if any, the covered business entity uses— 

3 (i) for the verification of product sup4 ply chains and on-site service provider 

5 practices to evaluate and address risks of 

6 forced labor and whether the verification 

7 was conducted by a third party; 

8 (ii) to require direct suppliers and on9 site service providers to provide written 

10 certification that materials incorporated 

11 into the product supplied or on-site serv12 ices, respectively, comply with the laws re13 garding forced labor of each country in 

14 which the supplier or on-site service pro15 vider is engaged in business; 

16 (iii) to maintain internal account17 ability standards and procedures for em18 ployees or contractors of the covered busi19 ness entity failing to meet requirements re20 garding forced labor; and 

21 (iv) to provide training on recognizing 

22 and preventing forced labor, particularly 

23 with respect to mitigating risks within the 

24 supply chains of products and on-site serv25 ices of the covered business entity, to emVerDate Sep 11 2014 21:45 Aug 03, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4241.IS S4241

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1 ployees, including management personnel, 

2 of the covered business entity who have di3 rect responsibility for supply chain man4 agement or on-site services; 

5 (C) a description of the findings of each 

6 audit required under paragraph (1)(A), includ7 ing the details of any instances of found or sus8 pected forced labor; and 

9 (D) a written certification, signed by the 

10 chief executive officer of the covered business 

11 entity, that— 

12 (i) the covered business entity has 

13 complied with the requirements of this Act 

14 and exercised due diligence in order to 

15 eradicate forced labor from the supply 

16 chain and on-site services of the covered 

17 business entity; 

18 (ii) to the best of the chief executive 

19 officer’s knowledge, the covered business 

20 entity has found no instances of the use of 

21 forced labor by the covered business entity 

22 or has disclosed every known instance of 

23 the use of forced labor; and 

24 (iii) the chief executive officer and any 

25 other officers submitting the report or cerVerDate Sep 11 2014 21:45 Aug 03, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S4241.IS S4241

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1 tification understand that section 1001 of 

2 title 18, United States Code (popularly 

3 known as the ‘‘False Statements Act’’), 

4 applies to the information contained in the 

5 report submitted to the Secretary. 

6 (c) REPORT OF VIOLATIONS TO CONGRESS.—Each 

7 year, the Secretary shall prepare and submit a report to 

8 Congress regarding the covered business entities that— 

9 (1) have failed to conduct audits required under 

10 this Act for the preceding year or have been adju11 dicated in violation of any other provision of this 

12 Act; or 

13 (2) have been found to have used forced labor, 

14 including the use of forced labor in their supply 

15 chain or by their on-site service providers. 

16 SEC. 3. AUDIT REQUIREMENTS. 

17 (a) IN GENERAL.—Each audit conducted under sec18 tion 2(b)(1)(A) shall meet the following requirements: 

19 (1) WORKER INTERVIEWS.—The auditor 

20 shall— 

21 (A) select a cross-section of workers to 

22 interview that represents the full diversity of 

23 the workplace, and includes, if applicable, men 

24 and women, migrant workers and local workers, 

25 workers on different shifts, workers performing 


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1 different tasks, and members of various produc2 tion teams; 

3 (B) if individuals under the age of 18 are 

4 employed at the facility of the direct supplier or 

5 on-site service provider, interview a representa6 tive group using age-sensitive interview tech7 niques; 

8 (C) conduct interviews— 

9 (i) on-site and, particularly in cases 

10 where there are indications of egregious 

11 violations about which employees may hesi12 tate to discuss at work, off-site of the facil13 ity and during non-work hours; and 

14 (ii) individually or in groups (except 

15 for purposes of subparagraph (B)); 

16 (D) use audit tools to ensure that each 

17 worker is asked a comprehensive set of ques18 tions; 

19 (E) collect from interviewed workers copies 

20 of the workers’ pay stubs, in order to compare 

21 the pay stubs with payment records provided by 

22 the direct supplier; 

23 (F) ensure that all worker responses are 

24 confidential and are never shared with manage25 ment; and 


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1 (G) interview a representative of the labor 

2 organization or other worker representative or3 ganization that represents workers at the facil4 ity or, if no such organization is present, at5 tempt to interview a representative from a local 

6 worker advocacy group. 

7 (2) MANAGEMENT INTERVIEWS.—The auditor 

8 shall— 

9 (A) interview a cross-section of the man10 agement of the supplier, including human re11 sources personnel, production supervisors, and 

12 others; and 

13 (B) use audit tools to ensure that man14 agers are asked a comprehensive set of ques15 tions. 

16 (3) DOCUMENTATION REVIEW.—The auditor 

17 shall— 

18 (A) conduct a documentation review to 

19 provide tangible proof of compliance and to cor20 roborate or find discrepancies in the informa21 tion gathered through the worker and manage22 ment interviews; and 

23 (B) review, at a minimum, the following 

24 types of documents: 


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1 (i) Age verification procedures and 

2 documents. 

3 (ii) A master list of juvenile workers. 

4 (iii) Selection and recruitment proce5 dures. 

6 (iv) Contracts with labor brokers, if 

7 any. 

8 (v) Worker contracts and employment 

9 agreements. 

10 (vi) Introduction program materials. 

11 (vii) Personnel files. 

12 (viii) Employee communication and 

13 training plans, including certifications pro14 vided to workers including skills training, 

15 worker preparedness, government certifi16 cation programs, and systems or policy ori17 entations. 

18 (ix) Collective bargaining agreements, 

19 including collective bargaining representa20 tive certification, descriptions of the role of 

21 the labor organization, and minutes of the 

22 labor organization’s meetings. 

23 (x) Contracts with any security agen24 cy, and descriptions of the scope of respon25 sibilities of the security agency. 


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1 (xi) Payroll and time records. 

2 (xii) Production capacity reports. 

3 (xiii) Written human resources poli4 cies and procedures. 

5 (xiv) Occupational health and safety 

6 plans and records including legal permits, 

7 maintenance and monitoring records, in8 jury and accident reports, investigation 

9 procedures, chemical inventories, personal 

10 protective equipment inventories, training 

11 certificates, and evacuation plans. 

12 (xv) Disciplinary notices. 

13 (xvi) Grievance reports. 

14 (xvii) Performance evaluations. 

15 (xviii) Promotion or merit increase 

16 records. 

17 (xix) Dismissal and suspension 

18 records of workers. 

19 (xx) Records of employees who have 

20 resigned. 

21 (xxi) Worker pay stubs. 

22 (4) CLOSING MEETING WITH MANAGEMENT.— 

23 The auditor shall hold a closing meeting with the 

24 management of the covered business entity to— 


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1 (A) report violations and nonconformities 

2 found in the facility; and 

3 (B) determine the steps forward to address 

4 and remediate any problems. 

5 (5) REPORT PREPARATION.—The auditor shall 

6 prepare a full report of the audit, which shall in7 clude— 

8 (A) a disclosure of the direct supplier’s or 

9 on-site service provider’s— 

10 (i) documented processes and proce11 dures that relate to eradicating forced 

12 labor; and 

13 (ii) documented risk assessment and 

14 prioritization policies as such policies relate 

15 to eradicating forced labor; 

16 (B) a description of the worker interviews, 

17 manager interviews, and documentation review 

18 required under paragraphs (1), (2), and (3); 

19 (C) a description of all violations or sus20 pected violations by the direct supplier of any 

21 forced labor laws of the United States or, if ap22 plicable, the laws of another country as de23 scribed in section 2(b)(2)(B)(ii); and 

24 (D) for each violation described in sub25 paragraph (C), a description of any corrective 


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1 and protective actions recommended for the di2 rect supplier consisting of, at a minimum— 

3 (i) the issues relating to the violation 

4 and any root causes of the violation; 

5 (ii) the implementation of a solution; 

6 and 

7 (iii) a method to check the effective8 ness of the solution. 

9 (b) ADDITIONAL REQUIREMENTS RELATING TO AU10 DITS.—Each covered business entity shall include, in any 

11 contract with a direct supplier or on-site service provider, 

12 a requirement that— 

13 (1) the supplier or provider shall not retaliate 

14 against any worker for participating in an audit re15 lating to forced labor; and 

16 (2) worker participation in an audit shall be 

17 protected through the same grievance mechanisms 

18 available to the worker available for any other type 

19 of workplace grievance. 

20 SEC. 4. ENFORCEMENT. 

21 (a) CIVIL DAMAGES.—The Secretary may assess civil 

22 damages in an amount of not more than $100,000,000 

23 if, after notice and an opportunity for a hearing, the Sec24 retary determines that a covered business entity has vio25 lated any requirement of section 2(b). 


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1 (b) PUNITIVE DAMAGES.—In addition to damages 

2 under subsection (a), the Secretary may assess punitive 

3 damages in an amount of not more than $500,000,000 

4 against a covered business entity if, after notice and an 

5 opportunity for a hearing, the Secretary determines the 

6 covered business entity willfully violated any requirement 

7 of section 2(b). 

8 (c) DECLARATIVE OR INJUNCTIVE RELIEF.—The 

9 Secretary may request the Attorney General institute a 

10 civil action for relief, including a permanent or temporary 

11 injunction, restraining order, or any other appropriate 

12 order, in the district court of the United States for any 

13 district in which the covered business entity conducts busi14 ness, whenever the Secretary believes that a violation of 

15 section 2(b) constitutes a hazard to workers. 

16 SEC. 5. REGULATIONS. 

17 Not later than 180 days after the date of enactment 

18 of this Act, the Secretary shall promulgate rules to carry 

19 out this Act. 

Æ 


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