Trafficking in Persons - Recruitment Fees - Methods of Payment

We finished up last week with a couple of posts on trafficking in persons. Thursday we discussed the general prohibition found in statutes and regulations (see Trafficking in Persons) and followed that up on Friday with definition of recruitment fees (see Trafficking in Persons - Recruit Fees). One of the prohibitions found in FAR 22.17 makes it unlawful for Government contractors and subcontractors to charge employees fees for the privilege of working.for the company.

Now we mentioned last week that a lot of firms might try to find some wiggle room in the regulations to, in effect, find a way to charge recruitment fees - finding ways to adhere to the letter of the law if not the spirit or intent of the law. There's a good reason because many of the laborers used to support the military in areas such as Afghanistan and Iraq (to name two) come from impoverished areas where people are unencumbered by any stigma attached to unethical conduct. If people want jobs, they're going to have to pay somebody.

The FAR makes it clear that the method of payment doesn't matter. Specifically, FAR states that a recruitment fee, as described last Friday, is a recruitment fee (i) regardless of whether the payment is paid in property or money, (ii) deducted from wages, (iii) paid back in wage or benefit concessions, (iv) paid back as a kickback, (v) bribe, (vi) in-kind payment, (vii) free labor, (viii) tip or tribute, or (ix) collected by an employer or a third party, whether licenses or unlicensed, including:

1. Agents
2. Labor brokers
3. Recruiters
4. Staffing firms (including private employment and placement firms)
5. Subsidiaries/affiliates of the employer
6. Any agent or employee of such entities, and
7. Subcontractors of all tiers.

There is one final point that we should discuss - the job has to be accurately described. The regulations prohibit the use of misleading or fraudulent practices during the recruitment of employees or offering of employment, such as failing to disclose, in a format and language understood by the employee, basic information or making material misrepresentations during the recruitment process regarding key terms and conditions of employment, including wages and fringe benefits, the location of work, the living conditions, housing and associated costs, any significant costs to be charged (excluding recruitment fees), and, if applicable, the hazardous nature of the work.

Trafficking in Persons - Recruitment Fees

Yesterday we discussed the FAR prohibitions against "trafficking in persons" and the underlying statutory basis for those regulations (see Trafficking in Persons). One of the prohibitions, as you recall, was one prohibiting contractors and subcontractors from charging employees recruitment fees. One of the problems with this prohibition has been that no one could agree on what constituted "recruitment fees". In fact, in 2015, GAO (Government Accountability Office) came out with a report recommending that agencies develop a more precise definition of recruitment fees. According to GAO, without a clear definition, agencies would face challenges enforcing the prohibition. So, through the regulatory process, the Government has done just that; defined in FAR 22.1702 the term recruitment fees. Here it is:

Recruitment fees means fees of any type, including charges, costs, assessments, or other financial obligations, that are associated with the recruitment process, regardless of the time, manner, or location of imposition or collection of the fee.

Recruitment fees include, but are not limited to, the following fees when they are associated with the recruiting process for:

• Soliciting, identifying, considering, interviewing, referring, retaining, transferring, selecting, training, providing orientation to, shills testing, recommending, or placing employees or potential employees
• Advertising
• Obtaining permanent or temporary labor certification, including any associated fees
• Processing applications and petitions
• Acquiring visa, including any associated fees;
• Acquiring photographs and identity or immigration documents, such as passports, including any associated fees
• Accessing the job opportunity, including required medical examinations and immunizations; background reference, and security clearance checks and examinations; and additional certifications;
• An employer's recruiters, agents or attorneys, or other notary or legal fees;
• Language interpretation or translation, arranging for or accompanying on travel, or providing other advice to employees or potential employees;
• Government-mandated fees, such as b order crossing fees, levies, or worker welfare funds;
• Transportation and subsistence costs for everything until disembarking at work site.
• Equipment charges
• Security deposits, bonds, and insurance 

This seems like a very comprehensive listing. Although some contractors and subcontractors might look for wiggle room to find ways to make employees pay some sort of fee for securing the job, the intent here is to not saddle employees with these otherwise allowable fees. Such fees, recruitment fees as they are called, must be charged direct to a contract or allocated though an indirect rate.

Trafficking in Persons

The degrading institution of slavery continues through the world. Trafficking in persons is a modern form of slavery, and it is the largest manifestation of slavery today. At least 700 thousand people annually, primarily women and children, are trafficked within or across international borders. Approximately 50 thousand women and children are trafficked into the United States each year. Many of these people are trafficked into the international sex trade, often by force, fraud, or coercion. But trafficking in persons is not limited to the sex industry. This growing transnational crime also includes force labor and involves significant violations of labor, public health, and human rights standards worldwide. (22 CFR 78).

This "trafficking" statute also applies to Government contractors and is implemented by FAR (Federal Acquisition Regulations) 22.17.  Now one would not think that trafficking would be an issue with Government contractors but there have been documented cases where contractors over in Kuwait, Iraq, and Afghanistan who provide various services to military, have used subcontractors to fill their staffing needs. These subcontractors have induced workers from different (often impoverished) countries to work for them in sometimes inhuman conditions. In one recently settled case, the subcontractor even took their passports away so they couldn't leave.

The FAR coverage prohibits contractors, contractor employees, subcontractors, subcontractor employees, and their agents from:

1. Engaging in severe forms of trafficking in persons during the period of contract performance
2. Procuring commercial sex acts during the period of performance
3. Using forced labor in the performance of the contract
4. Destroying, concealing, confiscating, or otherwise denying access by an employee to the employee's identity or immigration documents, such as passports or drivers' licenses, regardless of issuing authority
5. Using misleading or fraudulent practices during the recruitment of employees or offering of employments, such as failing to disclose, in a format and language accessible to the worker, basic information or making material misrepresentations during the recruitment of employees regarding the key terms and conditions of employment, including wages and fringe benefits, the location of work the living conditions, housing and associated costs, any significant costs to be charged to the employee, and if applicable, the hazardous nature of the work.requires certification and compliance plans
6. Using recruiters that do not comply with local labor laws of the country in which the recruiting takes place
7. Charging employees recruitment fees                     
8. Failing to properly return workers to their countries after the end of employment.
9. Providing or arranging housing that fails to meet the host country housing and safety standards

Contractors are required to periodically certify compliance and ensure that their subcontractors do the same. Enforcement of this is handled by the Labor Department.