Texas House Bill HB820

Texas 2021 - 87th Regular

Caption

Relating to requiring certain business entities to audit the business's supply chain and on-site services for the use of forced labor; providing an administrative penalty.

Impact

The introduction of HB 820 signifies a substantial shift in how businesses in Texas will be required to operate, particularly concerning ethical labor practices. Covered businesses must not only conduct audits but also report their findings annually to the Secretary of State. Failures to comply can result in significant administrative penalties of up to $500 million for willful violations. The intention behind the bill is to eradicate forced labor from corporate supply chains by enforcing stricter oversight and accountability, potentially affecting the operations and profitability of those businesses.

Summary

House Bill 820 mandates that certain large business entities conduct annual audits of their supply chains and on-site services to identify and address the use of forced labor. The bill specifies that it applies to businesses with annual worldwide gross receipts exceeding $500 million and outlines what constitutes forced labor, including adherence to international and federal laws against human trafficking. This legislation aims to enhance corporate accountability and transparency while protecting workers from exploitation in various forms.

Contention

The bill has sparked discussions about the balance between regulatory oversight and the operational autonomy of businesses. Proponents argue that the audits are essential to eliminate unethical labor practices that may be hidden within complex supply chains, while opponents may perceive the required audits and associated penalties as burdensome. Concerns also arise regarding the potential impact on small suppliers connected to large corporations, who may struggle to meet the new compliance requirements without significant investment in their own operational practices.