California Cracks Down: Companies Required To Disclose Child Labor Risks In Workplace Inspections

On 22 September 2024, the Governor of California signed off on Assembly Bill 3234 (AB 3234), which highlights the US private sector’s role  in ending child labor. California entities are already required to publish some information on child labor through the California Transparency in Supply Chain Act (CTSCA), but AB 3234 requires more granular information. The bill establishes new specific minimum reporting and disclosure requirements for businesses that both:

1. Employ people in California
   and
2. Carry out any voluntary social compliance audit.

But there remain unanswered questions around the scope and definitions of the Bill, which means companies operating in California should stay informed, and seriously consider updating and modernizing their child labor policies and practices.

The highest price paid is always that of the victims

The highest price paid is always that of the victims. Companies who don’t see that, or are implicated, risk reputational damage with customers and the media. The recent Federal clampdown has resulted in several high–profile damages claims. The latest digital HRDD worker voice tools will assist companies who need to gather the correct information to stay compliant for their next social compliance audit.

Child labor plagues US manufacturing

Bill 3234 follows a wave of child labor scandals and media exposés across the US. The raw numbers are worrying. An estimated 3.3 people out of every 1,000 in the US exist in conditions of modern slavery; almost double the rate in Canada and the United Kingdom. In 2022, 130,000 unsupervised minors, often in precarious economic conditions and highly vulnerable, were found to have entered the US. 

While government agencies are prioritising the issue, it’s not always easy to detect and identify child labor. These workers are hidden in the night shift or the back room, with low access to rights or support.

Factsheet: What is California AB 3234?

Here’s what can currently say for certain about the law:

• The law came into force in January of 2025.
• It applies to all businesses employing workers in California.
• The law does not mandate social compliance audits, it standardizes them for  companies that choose to do so (in whole or in part).
• California employers who carry out a social compliance audit must publish an accessible report of their findings on their website. 
• A ‘child’ is defined in the Bill as a natural person under 18-years old. 

The Bill requires that any such social compliance audit must now contain the following:

• The exact date and time a social compliance audit was conducted, including shift time.
• A clear statement of fact pertaining to whether business activities did involve or support the use of child labor.
• Any corporate policies or agreements made by the company in relation to child labor. 
• Information regarding whether children were exposed to unsafe working conditions, or conditions that could impact their physical and mental health.
• Details of whether children were required to work during school hours, on night shifts, or other irregular hours.
• A disclaimer indicating that the auditing body carrying the social compliance audit was not a governmental body, or authorized to legally verify compliance with state or federal laws.

The scope and application of the law still remains unclear in terms of  coverage, implementation timeline, and enforcement, and additional guidance is forthcoming from authorities. In the meantime, companies will need to enhance their child labor monitoring capabilities significantly.  

Expose child labor with worker voice tools

The majority of companies do not have visibility over the extent of child labor in their business practices. Rooting out child labor is very difficult; it is often hidden, and factories themselves may not be aware that they are employing minors. 

To complicate matters further, States differ on their approach to fighting child labor, so interstate companies must create a child labor policy that satisfies all of their compliance obligations.

The majority of companies do not have visibility over the extent of child labor in their business practices

To overcome the barriers that hide child labor in the supply chain, companies need to use digital tools that incorporate worker voice, and fight child labor at its source. 

Ulula’s standardised worker voice tools and surveys are aligned with internationally recognised indicators to assess child labor and other social and human rights risks in the workplace. Who better to identify and mitigate child labor risks than the workers with eyes and ears on the ground? With Ulula they can do so anonymously, without fear of reprisal. That way, workers can support companies with their social compliance audits on any device, anonymously, in any language, and in any location. 

Ulula’s tools are always on and, where appropriate, accessible to both workers, employers, buyers and other stakeholders. In-person audits are key, but they’re often infrequent and easily circumvented. A significant share of child labor takes place at night, when auditors are already off the clock. Furthermore, many of these children may not speak English, and may not be aware of where they can go for help, or what their rights are. 

Workers on the ground can keep companies in the loop on child labor risks with Ulula, even if they don’t speak English. If businesses deploy Ulula’s survey, grievance and worker voice tools alongside their inspections regime, their inspectors aren’t going in blind. They’ll be empowered with information that helps them dig deeper into the issues, so they can get transparency over potential child labor risks and resolve them quickly.

Along with its enterprise and governance features, Ulula empowers companies to:

Streamline Supply Chain Transparency 

• Access direct worker voice insights with an always-on global platform;
• Analyze data in real-time with intuitive analytics and dashboards;
• Prioritize risks and report on actions.

Digitize Human Rights Due Diligence

• Establish a global grievance and resolution mechanism with auditable; reporting to comply with California AB 3234;
• Implement across global supply chains & communities.

Improve Working Conditions

• Establish whistleblower channels;
• Communicate directly and anonymously with workers;
• Meet growing consumer demands for ethical business practices.

To streamline your child labor reporting policy, build compliance into your processes and work towards more transparent and resilient supply chains, book a demo.