PRACTICAL GUIDE

TO DUE DILIGENCE ON
RECRUITMENT FEES IN
INTERNATIONAL SUPPLY CHAINS
April 2020 | Version 1.0
EXECUTIVE SUMMARY
While there are many drivers of forced labor, the payment of recruitment fees by
workers to obtain work is one of the most widespread factors that can contribute to
situations of forced labor. In many countries and industries it is common for workers,
especially migrant workers, to be charged fees or to incur other costs to obtain and retain
employment, and to return home after employment has concluded. It is increasingly
understood that workers may have to borrow money to pay these recruitment fees and
costs, taking on debts that leave them vulnerable to exploitation and unable to leave their
jobs until the debt is repaid, contributing to situations of forced labor. This awareness
has meant that the issue of payment of recruitment fees has become an increasingly
important topic for international companies, both in relation to their own workforces and
to workers employed in their supply chains. There are growing customer, regulatory and
other stakeholder expectations on companies to implement practices in their operations
and supply chains that contribute to the elimination of such fees. Equally, it is increasingly
recognized by companies and employers that tolerating working conditions that could
lead to forced labor can have material negative business impacts.
The Responsible Business Alliance (RBA) is a nonprofit comprised of multi-industry
companies committed to supporting the rights and well-being of workers and
communities worldwide affected by global supply chains. In order to accelerate change
and harmonize due diligence across multiple industries that share recruitment supply
chains and drive labor market transformation through collective action, the RBA launched
its multi-industry, multi-stakeholder Responsible Labor Initiative (RLI) in 2017. As part of
its Code of Conduct, the RBA has a clear position that workers should not pay employers’
or labor agents’ recruitment fees and any such fees, if found to have been paid by
workers, should be reimbursed to the workers as soon as practicable.
This Guide provides practical advice on how this element of the Code of Conduct should
and could be implemented. It builds on in-house RBA guidance, the experience of RBA
and RLI members, guidance and learning from international agencies, advocates for
migrant workers, and guidance from other leading initiatives. It includes examples of
emerging industry good practices, tools and guidance to help companies operationalize
and promote a “no-fees” recruitment policy for the benefit of workers.
This Guide covers the following core processes, which are aligned with the framework
provided by the Organisation for Economic Co-operation and Development (OECD) Due
Diligence Guidance for Responsible Business Conduct.

Disclaimer:
This report should be taken only as a source of information and analysis. It is not given, and should not be taken,
as legal advice and the provider of the information will not be held liable for any direct or consequential loss
arising from reliance on the information contained herein.

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EMBED Companies should adopt a clear policy on non-payment of recruitment fees by workers that
RESPONSIBLE can be communicated internally and to all business partners recruiting and employing workers.
BUSINESS Policies may be included within existing codes of conduct or can be developed on a stand-
CONDUCT INTO alone basis. They should set out the scope of application (e.g., all owned operations as well as
POLICIES & suppliers and agencies they use) and clearly define the fees and costs that are unacceptable.
The RBA offers a “Definition of Fees” document for this purpose.
MANAGEMENT
SYSTEMS Policies should be endorsed and communicated by senior executives.
The key procedures to implement the policy should be set out, as well as the lines of
Embedding “No-fees”
responsibility and the consequences of non-compliance.
requirements
It is important to move from using policy to react to situations where workers have paid
recruitment fees to one in which companies are developing proactive and preventive
strategies that enable no-fees recruitment.

IDENTIFY & The next stage in the due diligence process is to identify where migrants are being hired in
ASSESS ADVERSE supply chains, how they have been recruited and the costs they are likely to have incurred.
IMPACTS IN The key steps are:
OPERATIONS, • Mapping operations and supply chains to understand where migrant workers are located;
SUPPLY CHAINS • Understanding worker and recruitment journeys from their homes to workplaces;
& BUSINESS • Identifying particular red flags that indicate higher risks for migrant workers;
RELATIONSHIPS
• Learning about risks in specific migration corridors and the typical fees that apply; and
Identifying the risks
• Prioritizing higher-risk geographies, suppliers and recruiters for further on-the-ground
action.
The RBA has developed specific tools that can assist in mapping labor supply chains and in
identifying potential recruitment fees. These include the RBA’s Online Risk Assessment Tool
and the RBA Migration Corridor Database.

IDENTIFY & Based on the initial risk assessment, companies can target workplace, labor and recruitment
ASSESS ADVERSE agent assessments where the risks of workers paying recruitment fees are highest. These
IMPACTS IN assessments may take the form of standard RBA audits, but a more specialized assessment
may be necessary to validate risks of recruitment fees, given workers’ fear of retaliation during
OPERATIONS, audit interviews.
SUPPLY CHAINS The RBA has a specialized supplemental audit protocol focused on the risks of forced labor,
& BUSINESS called the Supplemental Validated Audit Process (SVAP) on Forced Labor.
RELATIONSHIPS Constant monitoring of migrant workers’ situation and concerns through surveys, worker voice
Monitoring and auditing helplines, SMS, social media or off-cycle worker interviews can be effective in developing a
continuous picture of recruitment fees, and other general worker issues.

PROVIDE FOR OR Elimination of fee charging and exploitative actors from the recruitment process is the ultimate
COOPERATE IN aim, but where a worker is found to have paid recruitment fees and/or other related costs,
RBA policy is clear. The worker must be reimbursed as soon as practicable but no later than
REMEDIATION 90 days after commencement of employment.
WHEN
The RBA Validated Assessment Program (VAP) has guidance on timescales for repayment
APPROPRIATE depending on the severity of the situation. In more complex cases, a tailored repayment plan
Remediation and may need to be developed.
repayment Some key considerations include:
• Estimating how much workers have paid when there is no documentary evidence;
• Allocating responsibility for repayment;
• Developing a repayment plan that follows the timeframe prescribed by the RBA’s Code of
Conduct and Definition of Fees; and
• Communicating the repayment plan to all eligible workers and contacting any who may
have left employment.

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 Suppliers may be hesitant to change their recruitment model for one or two customers, but
CEASE, PREVENT experience among RBA members shows that they are prepared to make reasonable changes to
OR MITIGATE align with no-fees requirements if they understand why changes are necessary and what they
ADVERSE need to do to comply. There should be consistent communication about a no-fees policy with
IMPACTS suppliers by all company staff who engage with them, and messages should be reinforced by
senior board directors and commercial teams, not simply the compliance or human resource
Moving to no-fees (HR) teams.
recruitment: Engaging
with suppliers Engagement with suppliers should include making the case for no-fees recruitment so they
understand the commercial and policy reasons for the change. Such arguments can include:
• Regulatory trends in favor of no-fees recruitment – and therefore the benefits of
anticipating change;
• Potential civil or criminal liabilities for companies found to be associated with situations of
forced labor;
• Customer and consumer demand for no-fees recruitment – and therefore staying ahead of
customer requirements;
• Positive experiences within a company’s own direct operations of moving to a no-fees
model as a way of showing that it is a practical way forward;
• Commercial or operational benefits from moving to a no-fees model such as higher worker
retention; and
• Reputational damage that can arise from negative media and/or civil society
communications.
Explain migrant workers’ journeys, their level of indebtedness and the vulnerability this creates,
as suppliers simply may not be aware of the severity of the problem and its effect on workers’
livelihoods. Furthermore, supplier engagement should involve:
• Including clear and binding contractual clauses that set out real consequences of non-
compliance;
• Monitoring suppliers and recruitment agencies in the company’s supply chain for
compliance;
• Supporting suppliers with implementation, including with their own supply chain, through
training, advice, and assisting them in undertaking root-cause analysis and sharing
information on fees and migration journeys; and
• Ensuring employers do not seek to shift the cost of recruitment back onto workers through
wage reductions, forced savings, etc.

Implementing a no-fees policy also involves engaging with intermediaries in the entire
CEASE, PREVENT recruitment chain including labor agents, recruitment agencies and sub-agents. Engagement
OR MITIGATE with these intermediaries involves:
ADVERSE • Demonstrating there is a demand for recruitment services that are not based on workers
IMPACTS paying fees;
Moving to no-fees • Recognizing that labor agents need to be compensated for the services they provide to the
recruitment: Engaging employer;
with recruiters and
• Demonstrating that labor and recruitment agents can add value to their business by
other stakeholders
providing professional recruitment services;
• Establishing clear and formal contracts with labor agents covering the services they will
provide, the fees they will charge the employer, their obligation to ensure that fees are not
charged by their sub-agents, and their liability to repay any fees charged to workers they
provide; and
• Involving them in training and collaborative opportunities.
In addition, there are opportunities for engagement and partnership with industry and
sectoral bodies (such as the RBA), multi-stakeholder initiatives (such as the RLI), international
organizations and civil society. Such partnerships can build shared knowledge and increase
leverage as well as assist in advocacy with governments to improve the regulatory
environment.

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 When measures have been implemented to deliver remediation and to enhance prevention
TRACK with suppliers, recruiters and other stakeholders, the next step is to track the progress of
IMPLEMENTATION these actions.
& RESULTS This includes:
Tracking progress • Monitoring changes in recruitment practices to ensure that the risk of future fee
payments is minimized;
• Verifying that repayments have been completed in accordance with repayment plans;
and
• Conducting ongoing monitoring to make sure that any additional costs of recruitment
incurred by employers are not being passed on to workers.

COMMUNICATE It is important to communicate relevant due diligence and performance information externally.
This will usually include policies adopted, responsibility for implementation, a description of
HOW IMPACTS risk-assessment processes, the main risks identified, the key actions taken, including the
ARE ADDRESSED aggregated results of assessments, and details of any collaborative programs.
Reporting and Some key issues to consider include:
transparency
• Identifying and mapping the modern slavery reporting regulations with which companies
need to comply;
• Understanding the requirements of these reporting regulations and the types of
information that companies must disclose;
• Looking at other due diligence reporting beyond legal compliance that companies should
consider in order to meet the expectations of other stakeholders;
• Considering examples of current reporting practice, together with other tools and
guidance that companies can access; and
• Identifying Key Performance Indicators (KPIs) against which companies should be
reporting.

A full, detailed version of the Practical Guide to Due Diligence on Recruitment Fees in International
Supply Chains is available to RBA and RLI members here on the Member Service Portal.