Californian Government Modern Slavery Reporting Requirements

The California Transparency in Supply Chains Act focuses on increasing transparency around how businesses address slavery and human trafficking risks within their supply chains. Instead of requiring organisations to undertake prescribed due diligence activities, the legislation requires qualifying businesses to publicly disclose their approach to managing these risks. This includes information about relevant policies, sourcing practices, and internal procedures, enabling customers and other stakeholders to better understand and evaluate an organisation's supply chain management practices.

Read the full legislation and requirements here: https://oag.ca.gov/SB657

Who Needs to Report?

The California Transparency in Supply Chains Act applies to certain businesses that meet specific eligibility criteria. An organisation falls within the scope of the legislation if it operates as a retail seller or manufacturer, is classified as such in its tax filings, conducts business in the State of California, and has annual worldwide gross receipts exceeding USD 100 million.

What are the Reporting Requirements for the Act in California?

Covered businesses must publish information explaining the measures they use to address slavery and human trafficking risks in their supply chains. Disclosures generally cover:

• Processes used to verify supply chain risk, including whether assessments are independently reviewed

• Supplier audit arrangements, including whether audits are independent, announced, or unannounced

• Requirements for suppliers to certify compliance with applicable slavery and human trafficking laws

• Internal accountability systems, including policies and disciplinary processes for employees or contractors who do not meet expected standards

• Training for employees and managers with supply chain responsibility, focused on identifying, preventing, and reducing slavery and human trafficking risks.

When do I Need to Report?

Unlike many supply chain reporting laws, the California Transparency in Supply Chains Act does not establish an annual reporting cycle or require disclosures to be published by a specific date. Instead, covered businesses must ensure the required information is publicly accessible on an ongoing basis, with the legislation leaving the timing of publication and future updates to the organisation.

How do I Submit my Report?

Organisations subject to the California Transparency in Supply Chains Act must ensure their required disclosures are readily available to the public. Businesses that maintain a website are expected to publish the information online, while those without a website must provide the same disclosure in written form whenever it is requested.

Enforcement

Enforcement of the California Transparency in Supply Chains Act is achieved through court action rather than monetary penalties. If a covered business does not comply with the disclosure requirements, the California Attorney General may seek a court injunction directing the organisation to meet its obligations under the legislation.

Guidance

To encourage a consistent approach to compliance, the Secretary of State may issue guidance to help organisations prepare their required disclosures. The guidance can provide practical direction on developing a slavery and human trafficking statement, including recommendations on its structure, the information that may be included, and suitable ways to present the required disclosure topics.

Penalties for Non-Compliance