Existing human trafficking-related prohibitions for federal contractors and subcontractors were strengthened recently by the Obama Administration. While there has been an Executive Order outlawing certain "human trafficking activities for some time, anyone contracting with the federal government now has more responsibility. 

The new rule requires all firms with government contracts regardless of size to have a policy for their own workers. This includes:

  • Paying return transportation for non-nationals to go home
  • Mandating disclosures to such non-nationals about working conditions
  • Minimum housing standards

Firms also are required to pass the requirement for such a policy down to all tiers of subcontractors and vendors. This means modifying subcontract and purchase order forms.

In addition, the new rule requires firms that purchase from other countries (whether directly or through subs or suppliers) services or materials or supplies that are not "off the shelf" items and have a value of more than $500,000, to have a "Compliance Program." Beyond just advising subs and suppliers of their own responsibility (as the first part above requires), this part of the executive orders requires the contractor to conduct due diligence of the firms it is hiring to try to monitor their employment practices. This means firms will have to monitor their own purchases and those of their subs and suppliers, and if they think they may reach the threshold, have a Compliance Plan.

Violation of these regulations may result in suspension of contract payments, contract termination, suspension or debarment, and False Claims Act and other legal liabilities.

The authority for this action is Executive Order 13627, issued September 25, 2012 in a final rule (48 C.F.R. Parts 1, 2, 9, 12, 22, 42, and 52 (Final Rule)) published on January 29, 2015.