New rule clarifies strict interpretation of prohibition on charging workers recruitment fees (FAR 52.222-50).

Although FAR 52.222-50 (Combating Trafficking in Persons) has for years barred federal contractors and their subcontractors from charging employees or potential employees “recruitment fees”, the outer limits of what might constitute a “recruitment fee” has been the subject of much debate within industry.

That debate is now over in light of a recent rule interpretation that took effect in January 2019 and defines “recruitment fees” in a decidedly comprehensive manner.

As now defined, the FAR prohibition covers fees of any type associated with the recruiting process, regardless of the time, manner, or location of imposition or collection of that fee. The prohibition is not conditioned on the method of payment or who collects the payment. Payment in currency, property, wage deductions, concessions, and even illicit payments such as bribes, kickbacks, tips, or tributes, can all be recruitment fees.  Whether the fee is collected by the employer, subcontractors, or third parties, including informal and unlicensed brokers or intermediaries, is likewise irrelevant.

And the types of charges that cannot be passed through to the employee have like-wise been defined in the broadest of terms.  The types of costs that must not be passed on to employees include:

• Obtaining permanent or temporary labor certifications or visas, including 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 border crossing fees, levies, or worker welfare funds.
• Transportation and subsistence costs.

The Department of Defense and Department of State remain extremely focused on ensuring that federal contractors comply with the FAR clauses designed to detect and eradicate human trafficking within contractor supply chains. Government contractors at all levels should carefully review their codes, policies, and procedures to conform to the new FAR definition of recruiting fees.