Key Topic: Remediating Debt Bondage

Debt bondage or other forms of financial entrapment are indicators of forced labor and human trafficking and require a careful examination of all circumstances to determine the appropriate response. If it is found that workers are indebted because the supplier has been charging unreasonable costs for lodging, food, or other expenses, the company should require that the supplier nullify the debt or reduce it to an amount that is reasonable for the goods and services provided.  

If it is found that workers owe debts to a recruiter or labor broker, further investigation may be necessary to determine whether the supplier was aware that the broker had charged these fees or did not have a policy in place prohibiting brokers from charging fees. If the supplier was aware or did not have a policy in place to actively deter such practices, the supplier should be held financially responsible for repaying fees to the workers. If the supplier was actively engaged in discouraging its brokers from charging workers a fee, and the broker did so but concealed this practice from the supplier, a company may consider taking steps to obtain reimbursement from the broker or may simply choose to repay fees directly to workers. 

Audits may also uncover situations in which workers are forced to work overtime, with or without legal overtime pay. Regardless of pay, if workers are made to work long hours (i.e., beyond legal limits in the country) under threat of penalty, this is a situation of forced labor. Remediation of these situations requires careful consideration, including with respect to how a company’s own practices may have affected the situation. Quick turn-around times and last-minute changes in specifications on the part of buyers frequently lead to situations of mandatory overtime.  

Companies should encourage suppliers to be honest if they cannot complete an order without violating the terms of the code of conduct, and companies should reward them rather than moving their business to another supplier.