THE CALIFORNIA TRANSPARENCY IN SUPPLY CHAINS ACT: WHAT IT’S ABOUT AND HOW TO COMPLY

Enacted on January 1, 2012, the California Transparency in Supply Chains Act seeks to eliminate human trafficking, modern slavery, and other human rights abuses that often go unseen. The act requires companies that match certain criteria to disclose their efforts against modern-day slavery within their supply chain.

 

Does my business have to comply?

Businesses that must comply with the California Transparency in Supply Chains Act:

• “Do business in California,

• “Have annual worldwide gross receipts exceeding $100 million, and

• “Are identified as manufacturers or retail sellers on their California state tax returns.”

Businesses must evaluate whether or not they match the above criteria, as the California Franchise Tax Board sends a list of the companies that must comply to the attorney general.

 

How can my business comply with the act?

Businesses can comply with the act by posting an easily accessible disclosure to their website. If companies do not have a website, they are required to provide a written disclosure within 30 days of receiving a disclosure request from a consumer.

 

What should my business include in its disclosure?

The act lays out 5 topics in which businesses have to disclose “to what extent, if any” they do the following in order “to eradicate slavery and human trafficking from their product supply chains.” See below an excerpt from the act that details the 5 disclosure topics:

“1. Verification. Engages in verification of product supply chains to evaluate and address risks of human trafficking and slavery. The disclosure shall specify if the verification was not conducted by a third party.

“2. Audits. Conducts audits of suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains. The disclosure shall specify if the verification was not an independent, unannounced audit.

“3. Certifications. Requires direct suppliers to certify that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the country or countries in which they are doing business.

“4. Accountability. Maintains internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking.

“5. Training. Provides company employees and management, who have direct responsibility for supply chain management, training on human trafficking and slavery, particularly with respect to mitigating risks within the supply chains of products.”

Examples of disclosures: Patagonia , Nestlé, Dollar Tree

 

How can Workplace Options help my business comply?

Workplace Options’ Labor Solutions team can offer a number of services that will help you show your consumers that your business is taking steps to protect its workers. A few things we can assist with:

We can be a third-party verifier for your business and distribute surveys that ask workers the right questions to help you identify if there is a modern-day slavery issue in your supply chain.

We can implement WOVO for your organization. WOVO is a mobile app that provides two-way, confidential communication between workers and management that will hold employers accountable by pushing them to provide an effective response.

We can introduce your organization to Micro-Coaching and e-learning modules that can teach and train employees and management on how to identify problems within the workplace, what preventative measures to take, and more.

 

Sources:

The California Transparency in Supply Chains Act: A Resource Guide

Informational Letter to Companies that must comply with the act

FAQ on the act

Which companies do/do not have statements on the act? (2014)