10.01.2012 White House Issues Executive Order to Strengthen Protections Against Human Trafficking in Federal Contracts
BY: MARY PIVEC & IGOR M. BABICHENKO
On September 25, 2012, the White House issued an Executive Order (the “Order”) aimed at addressing trafficking in persons by government contractors. According to the Order, “[a]s the largest single purchaser of goods and services in the world, the United States government bears a responsibility to ensure that taxpayer dollars do not contribute to trafficking in persons.” The Order sets forth a list of prohibited conduct and increases government oversight by requiring contractors to provide more information about their current employees.
The Order explicitly prohibits federal contractors, contractor employees, subcontractors, and subcontractor employees from engaging in what the Order calls “trafficking-related activities.” Such activities include: (1) misleading or fraudulent recruitment practices such as failing to disclose basic information or making misleading statements as to wages, living conditions, or significant costs charged to the employee; (2) charging employees recruitment fees; and (3) destroying or confiscating an employee’s identity documents such as a passport or a driver’s license. In addition, for work performed outside the United States, the Order deems it a “trafficking-related activity” for the contractor to fail to pay an employee’s transportation costs back to his/her country of origin upon the end of employment.
In addition, the Order applies new tailored measures for larger contracts (in excess of $500,000) that are performed abroad. The Order requires contractors and subcontractors under such contracts to maintain compliance plans appropriate for the nature and scope of the activities performed. These plans must include: (1) an employee awareness program; (2) a process for employees to report possible human trafficking violations without fear of retaliation; and (3) recruitment and housing plans. Each contractor and subcontractor must also certify that neither it nor any of its subcontractors has engaged in “trafficking-related activities.”
Finally, the Order increases agencies’ ability to detect and address trafficking violations. The Order establishes a process to identify specific industries and sectors that have a history of human trafficking. Once identified, contracting agencies will put in place appropriate safeguards, guidance, and compliance assistance to combat human trafficking. Moreover, the Order stipulates that the Administrator for Federal Procurement Policy will provide guidance to agencies on how to improve monitoring of and compliance with actions to prevent trafficking and implement improved training for the federal acquisition workforce on procedures to prevent trafficking.
The Order demonstrates that the federal government will make a concerted effort to root out human trafficking violations by government contractors. Government contractors must be wary of the prohibitions and requirements set forth in the Order and must be careful not to adopt a “this does not apply to me” attitude. Due to increased government oversight, domestic contractors who employ H-1B and H-2B foreign temporary workers may face particular scrutiny. Such contractors must maintain compliance with myriad Department of Labor regulations, which are highly technical and easily violated. Contractors abroad will face increased scrutiny for employing children and other vulnerable populations. The Order shows a renewed seriousness in enforcing the government’s zero-tolerance policy on human trafficking in government contracts. Contractors who fail to take the Order seriously and implement appropriate safeguards may face significant consequences.
 For example, these regulations require employers to, among other things, provide proper living and working conditions, pay employees for non-productive or “benched” time, and pay recruitment and transportation fees. Employers of non-immigrant temporary workers may be blissfully unaware of such requirements. This bliss, however, may turn into a nightmare if the federal government initiates a compliance audit.
 In June of this year, the American Civil Liberties Union released a joint report with Yale Law School documenting the ongoing problem of government contractors providing services to the military and to U.S. diplomatic missions overseas using thousands of men and women from low-wage countries. According to the report, contractors use the false promise of high wages to lure vulnerable persons into employment and then force them to live and work in unsafe conditions.