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[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 4241 Introduced in Senate (IS)]

<DOC>

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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Slave-Free Business Certification 
Act of 2020''.

SEC. 2. REQUIRED REPORTING ON USE OF FORCED LABOR FROM COVERED BUSINESS 
              ENTITIES.

    (a) Definitions.--In this section:
            (1) Covered business entity.--The term ``covered business 
        entity'' means any issuer, as that term is defined in section 
        2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)), that has 
        annual, worldwide gross receipts that exceed $500,000,000.
            (2) Forced labor.--The term ``forced labor'' means any 
        labor practice or human trafficking activity in violation of 
        national and international standards, including--
                    (A) International Labor Organization Convention No. 
                182;
                    (B) the Trafficking Victims Protection Act of 2000 
                (22 U.S.C. 7101 et seq.); and
                    (C) any act that would violate the criminal 
                provisions related to slavery and human trafficking 
                under chapter 77 of title 18, United States Code, if 
                the act had been committed within the jurisdiction of 
                the United States.
            (3) Gross receipts.--The term ``gross receipts''--
                    (A) means the gross amount, including cash and the 
                fair market value of other property or services 
                received, gained in a transaction that produces 
                business income from--
                            (i) the sale or exchange of property;
                            (ii) the performance of services; or
                            (iii) the use of property or capital; and
                    (B) does not include--
                            (i) repayment, maturity, or redemption of 
                        the principal of a--
                                    (I) loan;
                                    (II) bond;
                                    (III) mutual fund;
                                    (IV) certificate of deposit; or
                                    (V) similar marketable instrument;
                            (ii) proceeds from--
                                    (I) the issuance of a company's own 
                                stock; or
                                    (II) the sale of treasury stock;
                            (iii) amounts received as the result of 
                        litigation, including damages;
                            (iv) property acquired by an agent on 
                        behalf of another party;
                            (v) Federal, State, or local tax refunds or 
                        other tax benefit recoveries;
                            (vi) certain contributions to capital;
                            (vii) income from discharge of 
                        indebtedness; or
                            (viii) amounts realized from exchanges of 
                        inventory that are not recognized under the 
                        Internal Revenue Code of 1986.
            (4) On-site service.--The term ``on-site service'' means 
        any service work provided on the site of a covered business 
        entity, including food service work and catering services.
            (5) On-site service provider.--The term ``on-site service 
        provider'' means any entity that provides workers who perform, 
        collectively, a total of not less than 30 hours per week of on-
        site services for a covered business entity.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Labor.
    (b) Audit and Reporting Requirements.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, and every year thereafter, each covered 
        business entity shall--
                    (A) conduct an audit of its supply chain, pursuant 
                to the requirements of section 3, to investigate the 
                presence or use of forced labor by the covered business 
                entity or its suppliers, including by direct suppliers, 
                secondary suppliers, and on-site service providers of 
                the covered business entity;
                    (B) submit a report to the Secretary containing the 
                information described in paragraph (2) on the results 
                of such audit and efforts of the covered business 
                entity to eradicate forced labor from the supply chain 
                and on-site services of the covered business entity; 
                and
                    (C)(i) publish the report described in subparagraph 
                (B) on the public website of the covered business 
                entity, and provide a conspicuous and easily understood 
                link on the homepage of the website that leads to the 
                report; or
                    (ii) in the case of a covered business entity that 
                does not have a public website, provide the report in 
                written form to any consumer of the covered business 
                entity not later than 30 days after the consumer 
                submits a request for the report.
            (2) Required report contents.--Each report required under 
        paragraph (1)(B) shall contain, at a minimum--
                    (A) a disclosure of the covered business entity's 
                policies to prevent the use of forced labor by the 
                covered business entity, its direct suppliers, and its 
                on-site service providers;
                    (B) a disclosure of what policies or procedures, if 
                any, the covered business entity uses--
                            (i) for the verification of product supply 
                        chains and on-site service provider practices 
                        to evaluate and address risks of forced labor 
                        and whether the verification was conducted by a 
                        third party;
                            (ii) to require direct suppliers and on-
                        site service providers to provide written 
                        certification that materials incorporated into 
                        the product supplied or on-site services, 
                        respectively, comply with the laws regarding 
                        forced labor of each country in which the 
                        supplier or on-site service provider is engaged 
                        in business;
                            (iii) to maintain internal accountability 
                        standards and procedures for employees or 
                        contractors of the covered business entity 
                        failing to meet requirements regarding forced 
                        labor; and
                            (iv) to provide training on recognizing and 
                        preventing forced labor, particularly with 
                        respect to mitigating risks within the supply 
                        chains of products and on-site services of the 
                        covered business entity, to employees, 
                        including management personnel, of the covered 
                        business entity who have direct responsibility 
                        for supply chain management or on-site 
                        services;
                    (C) a description of the findings of each audit 
                required under paragraph (1)(A), including the details 
                of any instances of found or suspected forced labor; 
                and
                    (D) a written certification, signed by the chief 
                executive officer of the covered business entity, 
                that--
                            (i) the covered business entity has 
                        complied with the requirements of this Act and 
                        exercised due diligence in order to eradicate 
                        forced labor from the supply chain and on-site 
                        services of the covered business entity;
                            (ii) to the best of the chief executive 
                        officer's knowledge, the covered business 
                        entity has found no instances of the use of 
                        forced labor by the covered business entity or 
                        has disclosed every known instance of the use 
                        of forced labor; and
                            (iii) the chief executive officer and any 
                        other officers submitting the report or 
                        certification understand that section 1001 of 
                        title 18, United States Code (popularly known 
                        as the ``False Statements Act''), applies to 
                        the information contained in the report 
                        submitted to the Secretary.
    (c) Report of Violations to Congress.--Each year, the Secretary 
shall prepare and submit a report to Congress regarding the covered 
business entities that--
            (1) have failed to conduct audits required under this Act 
        for the preceding year or have been adjudicated in violation of 
        any other provision of this Act; or
            (2) have been found to have used forced labor, including 
        the use of forced labor in their supply chain or by their on-
        site service providers.

SEC. 3. AUDIT REQUIREMENTS.

    (a) In General.--Each audit conducted under section 2(b)(1)(A) 
shall meet the following requirements:
            (1) Worker interviews.--The auditor shall--
                    (A) select a cross-section of workers to interview 
                that represents the full diversity of the workplace, 
                and includes, if applicable, men and women, migrant 
                workers and local workers, workers on different shifts, 
                workers performing different tasks, and members of 
                various production teams;
                    (B) if individuals under the age of 18 are employed 
                at the facility of the direct supplier or on-site 
                service provider, interview a representative group 
                using age-sensitive interview techniques;
                    (C) conduct interviews--
                            (i) on-site and, particularly in cases 
                        where there are indications of egregious 
                        violations about which employees may hesitate 
                        to discuss at work, off-site of the facility 
                        and during non-work hours; and
                            (ii) individually or in groups (except for 
                        purposes of subparagraph (B));
                    (D) use audit tools to ensure that each worker is 
                asked a comprehensive set of questions;
                    (E) collect from interviewed workers copies of the 
                workers' pay stubs, in order to compare the pay stubs 
                with payment records provided by the direct supplier;
                    (F) ensure that all worker responses are 
                confidential and are never shared with management; and
                    (G) interview a representative of the labor 
                organization or other worker representative 
                organization that represents workers at the facility 
                or, if no such organization is present, attempt to 
                interview a representative from a local worker advocacy 
                group.
            (2) Management interviews.--The auditor shall--
                    (A) interview a cross-section of the management of 
                the supplier, including human resources personnel, 
                production supervisors, and others; and
                    (B) use audit tools to ensure that managers are 
                asked a comprehensive set of questions.
            (3) Documentation review.--The auditor shall--
                    (A) conduct a documentation review to provide 
                tangible proof of compliance and to corroborate or find 
                discrepancies in the information gathered through the 
                worker and management interviews; and
                    (B) review, at a minimum, the following types of 
                documents:
                            (i) Age verification procedures and 
                        documents.
                            (ii) A master list of juvenile workers.
                            (iii) Selection and recruitment procedures.
                            (iv) Contracts with labor brokers, if any.
                            (v) Worker contracts and employment 
                        agreements.
                            (vi) Introduction program materials.
                            (vii) Personnel files.
                            (viii) Employee communication and training 
                        plans, including certifications provided to 
                        workers including skills training, worker 
                        preparedness, government certification 
                        programs, and systems or policy orientations.
                            (ix) Collective bargaining agreements, 
                        including collective bargaining representative 
                        certification, descriptions of the role of the 
                        labor organization, and minutes of the labor 
                        organization's meetings.
                            (x) Contracts with any security agency, and 
                        descriptions of the scope of responsibilities 
                        of the security agency.
                            (xi) Payroll and time records.
                            (xii) Production capacity reports.
                            (xiii) Written human resources policies and 
                        procedures.
                            (xiv) Occupational health and safety plans 
                        and records including legal permits, 
                        maintenance and monitoring records, injury and 
                        accident reports, investigation procedures, 
                        chemical inventories, personal protective 
                        equipment inventories, training certificates, 
                        and evacuation plans.
                            (xv) Disciplinary notices.
                            (xvi) Grievance reports.
                            (xvii) Performance evaluations.
                            (xviii) Promotion or merit increase 
                        records.
                            (xix) Dismissal and suspension records of 
                        workers.
                            (xx) Records of employees who have 
                        resigned.
                            (xxi) Worker pay stubs.
            (4) Closing meeting with management.--The auditor shall 
        hold a closing meeting with the management of the covered 
        business entity to--
                    (A) report violations and nonconformities found in 
                the facility; and
                    (B) determine the steps forward to address and 
                remediate any problems.
            (5) Report preparation.--The auditor shall prepare a full 
        report of the audit, which shall include--
                    (A) a disclosure of the direct supplier's or on-
                site service provider's--
                            (i) documented processes and procedures 
                        that relate to eradicating forced labor; and
                            (ii) documented risk assessment and 
                        prioritization policies as such policies relate 
                        to eradicating forced labor;
                    (B) a description of the worker interviews, manager 
                interviews, and documentation review required under 
                paragraphs (1), (2), and (3);
                    (C) a description of all violations or suspected 
                violations by the direct supplier of any forced labor 
                laws of the United States or, if applicable, the laws 
                of another country as described in section 
                2(b)(2)(B)(ii); and
                    (D) for each violation described in subparagraph 
                (C), a description of any corrective and protective 
                actions recommended for the direct supplier consisting 
                of, at a minimum--
                            (i) the issues relating to the violation 
                        and any root causes of the violation;
                            (ii) the implementation of a solution; and
                            (iii) a method to check the effectiveness 
                        of the solution.
    (b) Additional Requirements Relating to Audits.--Each covered 
business entity shall include, in any contract with a direct supplier 
or on-site service provider, a requirement that--
            (1) the supplier or provider shall not retaliate against 
        any worker for participating in an audit relating to forced 
        labor; and
            (2) worker participation in an audit shall be protected 
        through the same grievance mechanisms available to the worker 
        available for any other type of workplace grievance.

SEC. 4. ENFORCEMENT.

    (a) Civil Damages.--The Secretary may assess civil damages in an 
amount of not more than $100,000,000 if, after notice and an 
opportunity for a hearing, the Secretary determines that a covered 
business entity has violated any requirement of section 2(b).
    (b) Punitive Damages.--In addition to damages under subsection (a), 
the Secretary may assess punitive damages in an amount of not more than 
$500,000,000 against a covered business entity if, after notice and an 
opportunity for a hearing, the Secretary determines the covered 
business entity willfully violated any requirement of section 2(b).
    (c) Declarative or Injunctive Relief.--The Secretary may request 
the Attorney General institute a civil action for relief, including a 
permanent or temporary injunction, restraining order, or any other 
appropriate order, in the district court of the United States for any 
district in which the covered business entity conducts business, 
whenever the Secretary believes that a violation of section 2(b) 
constitutes a hazard to workers.

SEC. 5. REGULATIONS.

    Not later than 180 days after the date of enactment of this Act, 
the Secretary shall promulgate rules to carry out this Act.
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