GOVERNMENT CONTRACTORS BEWARE! New Definition of “Recruitment Fees” Clarifies What Constitutes Human Trafficking-Related Activities – And It May Not Be What You Think

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Can requiring that a job applicant obtain and pay for a passport photo make a U.S. government contractor run afoul of human trafficking rules? Potentially “yes” under a new final rule clarifying what constitutes human trafficking under the Federal Acquisition Regulation (“FAR”).

Since 2015, the U.S. government has prohibited U.S. government contractors from engaging in human trafficking, including charging employees “recruitment fees,” via FAR 52.222-50. Previously, the U.S. government’s prohibition lacked a definition for the term “recruitment fees.” To provide clarity and ensure consistency in implementation of the FAR’s prohibition on human trafficking, effective January 22, 2019, the FAR Council promulgated a final rule which adds a definition of “recruitment fees” to FAR subpart 22.17 and the associated clause at FAR 52.222-50. The final rule expressly identifies various types of fees that contractors, contractor employees, subcontractors, subcontractor employees, and their agents are prohibited from charging employees or potential employees. See Department of Defense, General Services Administration, National Aeronautics and Space Administration, Federal Acquisition Regulation: Combating Trafficking in Persons—Definition of “Recruitment Fees,” 83 Fed. Reg. 65,466 (Dec. 20, 2018).

Notably, the final rule defines “recruitment fees” as far more than simply a fee paid to a recruiter for recruiting services. The prohibition on charging employees or potential employees “recruitment fees” includes fees “of any type, including charges, costs, assessments, or other financial obligations, that are associated with the recruiting process, regardless of the time, manner, or location of imposition or collection of the fee.” FAR 52.222-50. These recruitment fees include, but are not limited to, fees for the following when associated with the recruiting process:

“(i)     Soliciting, identifying, considering, interviewing, referring, retaining, transferring, selecting,  training, providing orientation to, skills testing, recommending, or placing employees or potential employees;

(ii)      Advertising;

(iii)     Obtaining permanent or temporary labor certification, including any associated fees;

(iv)     Processing applications and petitions;

(v)      Acquiring visas, including any associated fees;

(vi)     Acquiring photographs and identity or immigration documents, such as passports, including any associated fees;

(vii)     Accessing the job opportunity, including required medical examinations and immunizations; background, reference, and security clearance checks and examinations; and additional certifications;

(viii)     An employer’s recruiters, agents or attorneys, or other notary or legal fees;

(ix)       Language interpretation or translation, arranging for or accompanying on travel, or providing other advice to employees or potential employees;

(x)        Government-mandated fees, such as border crossing fees, levies, or worker welfare funds;

(xi)       Transportation and subsistence costs . . .;

(xii)      Security deposits, bonds, and insurance; and

(xiii)     Equipment charges.”

Id.

Further, the final rule explains that a recruitment fee is a recruitment fee, regardless of how it is charged (such as requiring that the employee pay for the fees in money or property or deducting the fees from wages) or whether the fee is collected by the U.S. government contractor itself or a third-party (such as an agent, recruiter, staff firm, labor broker, or subcontractor). Id.

While to some this new rule may seem technical in nature, from a practical perspective, certain government contractors may in fact charge employees or potential employees, or deduct from wages, fees that are now deemed “recruitment fees,” such as those associated with obtaining passports, visas, and/or immunizations. This is particularly so where work is performed overseas. These contractors therefore may be engaging in prohibited conduct without even knowing it. In light of the new final rule, government contractors should closely review their recruiting and hiring practices, including those used by third-parties such as agents and recruiters, against FAR 52.222-50 to make sure they are not charging employees or potential employees recruitment fees as defined by the FAR and thereby engaging in prohibited conduct.

Written by Jeniffer Roberts, Katherine Veeder, and Mark Wade, Jr., attorneys in Alston & Bird’s Government Contracts Group.