The key to fighting modern slavery in supply chains? Eliminate worker recruitment fees

For those of us looking for ways to end forced labor and human trafficking, the sheer magnitude of the problem can be daunting. We see debt bondage and other forms of coercion and intimidation present in all sorts of commodity, product, and services supply chains,…

August 13, 2014

For those of us looking for ways to end forced labor and human trafficking, the sheer magnitude of the problem can be daunting. We see debt bondage and other forms of coercion and intimidation present in all sorts of commodity, product, and services supply chains, and in developed and developing economies alike. Yet, for all the complexity, there is a remarkably common factor that underlies much of human trafficking – particularly labor trafficking – and that is the charging of fees to workers to obtain a job. This common thread provides a clear and compelling avenue for immediate action. Companies can make significant, lasting progress against human trafficking by setting a clear policy against charging fees for work and committing themselves to root out the practice in the recruitment and employment lifecycle, even buried within their supply chains.

How do recruitment fees lead to human trafficking? When people without many employment options migrate for work, they aren’t expecting to get rich; they are seeking decent work that will enable them to support themselves and their families. To find and secure jobs elsewhere, these job seekers often end up connected to a web of labor recruitment agents (also known as labor brokers or private employment agencies) who charge them fees to place them in a job. The fees can be exorbitant, necessitating selling or mortgaging their land, borrowing at usurious rates, and/or signing up for contracts that will keep the worker from his or her family for years. The fees also often tend to pile up, with more added as the worker moves through the recruitment and hiring life cycle. This effectively makes abandoning such financial investments impossible.

Even those workers who do make their way through the recruitment pipeline are often cheated in other ways. Sometimes the job doesn’t materialize at all. Or, frequently, the job is nothing like what was promised, with different tasks, location, pay, and living conditions than the worker was led to expect.

The end result is that the multiple fees, combined with lower pay and higher charges for expenses, trap the worker in debt bondage, sometimes for years on end. Too many – employers and recruiters alike – are profiting by pushing the normal human resources expenses of hiring workers onto the migrant workers themselves, without any system of accountability. Currently, the unscrupulous recruiters, and those to whom they provide labor, operate in an environment of virtual impunity from punishment by either the companies they ultimately supply to or the countries in which they operate.

Without these fees, much of modern day slavery would be eliminated because it is the crucial factor of bondage to that debt that tips a difficult, poorly paid job over the edge into a job from which the workers cannot leave.

What next?

Any company that seeks to fight trafficking in a meaningful, systematic way cannot do so without putting a no-fees policy at the heart of their efforts.

There are, of course, ethical recruiters who play a vital role in the employment system and whose business model is correctly based on charging business, not workers, for their services. Driving factories and suppliers to adopt and enforce ethical recruitment practices will dramatically lower companies’ risk of slavery in their supply chains. Best practice from companies involves returning to workers the fees they paid when evidence is found that they, not the employer, paid for the cost of their recruitment. When supplier factories and farms are required to pay back fees charged by their recruiters, the factories and farms very, very quickly figure out ways to recruit and hire ethically.

Furthermore, eliminating fees will further reduce the risks of rampant corruption involved in cross-border labor recruitment. As the system operates now, the typical multinational company is very much at risk of violating anti-corruption statues like the U.S.’s Foreign Corrupt Practices Act by refusing to investigate and eliminate ties to unethical labor recruiters in their supply chains.

Yet far too few companies currently have a no-fees policy for their supply chains. KnowTheChain helps companies, investors, and consumers discover the policies companies have in place to protect against human trafficking in their supply chains. While the SB-657 legislation does not call out recruitment fees in particular, to truly fight trafficking, companies must take accountability for how workers are recruited and hired into the workplaces that produce their products around the world. Look for companies recognizing the need to go beyond the letter of the law, with an explicit policy against fee-charging throughout a company’s supply chain – and, just as important, concrete steps to determine whether and how the policy is implemented successfully.

Numerous resources exist to help companies, investors, unions, consumers, NGOs, and government officials to understand and implement a legal, ethical recruitment system. For more information, see Resources for Responsible Recruitment, Verité’s Fair Hiring Toolkit, and Verité’s Ethical Framework for Cross-border Labor Recruitment. For more on the connection between illegal recruitment and corruption, see Verité’s white paper on corruption related to fees and other migration processes. A fellow KnowTheChain partner, the Interfaith Center on Corporate Responsibility (ICCR) is also very active in promoting no-fees anti-trafficking policies. The International Labor Organization (ILO) is also promoting Convention 181 “Private Employment Agencies Convention” to guide how countries regulate private employment systems.

Shawn MacDonald is Director of Programs and Research at Verité. You can reach him at