74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 3521
House Bill 3382
Sponsored by COMMITTEE ON BUSINESS AND LABOR (at the request of
Global Exchange)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Requires that state procurement practices support contractors
that do not maintain sweatshop labor working conditions.
Requires contractors to comply with certain human rights and
labor laws and to pay minimum wage rates set by Director of
Oregon Department of Administrative Services. Prohibits
contractors from subjecting workers to abusive or illegal
treatment. Requires contractors to maintain payroll records and
submit payroll records and other information to director.
Requires contractors to cooperate with investigation by director.
Requires director to take actions to implement, administer and
enforce law. Provides sanctions and damages for breach of
contract or violation of law. Requires director to establish
Sweatfree Procurement Advisory Group.
Provides exceptions.
A BILL FOR AN ACT
Relating to state procurement from sources that do not engage in
sweatshop labor practices.
Whereas this state spends millions of dollars annually in
public funds on goods and nonprofessional services; and
Whereas this state recognizes its ability as a market
participant to support goods and services that do not use, or do
not depend on, sweatshop labor working conditions that deprive
humans of basic rights and dignity; and
Whereas the prudent expenditure of public funds requires that
the state select responsible contractors; and
Whereas the state seeks to ensure that the integrity of the
procurement process is not undermined by contractors or
subcontractors who engage in sweatshop labor practices; and
Whereas contractors who use sweatshop labor are able to
underbid responsible contractors that pay fair wages and maintain
humane work environments and conditions; and
Whereas such practices place responsible contractors at a
competitive disadvantage, which may dissuade responsible
contractors from participating in the state's procurement
processes; and
Whereas by enacting this 2007 Act, the Legislative Assembly
does not intend to preclude the state or its contractors or
subcontractors from doing business with any foreign country; now,
therefore,
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Definitions. As used in sections 1 to 8 of this
2007 Act:
(1) 'Abusive forms of child labor' includes:
(a) Work performed by an individual under the age of 18 when
the individual does not voluntarily seek the work or the
individual is threatened by the individual's employer with
physical, mental or emotional harm for nonperformance;
(b) Work performed by an individual under the age of 18 in
violation of any applicable law of the country governing the
minimum age of employment, compulsory education or occupational
health and safety; and
(c) The use of an individual under the age of 18 for illegal
activities, including, but not limited to, the production or
trafficking of illicit drugs or for prostitution.
(2) 'Contract' means:
(a) An agreement for goods or service, including the supply of
goods, for an amount greater than $5,000 and having a term in
excess of three months to be purchased or provided at the expense
of this state or to be paid out of moneys deposited in the State
Treasury or out of trust moneys under the control of or collected
by this state; and
(b) Any amendment to a contract that causes the term of the
contract to exceed three months.
(3) 'Contractor' means a person with whom this state executes a
contract.
(4) 'Foreign convict or forced labor' includes any form of
labor used to produce or manufacture goods prohibited from
importation into the United States under 19 U.S.C 1307, abusive
forms of child labor and slave labor.
(5) 'Good' includes any good, material, supply or equipment.
(6) 'Slave labor' means any form of slavery, sale or
trafficking of individuals, debt bondage, indentured servitude,
serfdom or forced or compulsory labor.
(7) 'Sweatshop labor' means:
(a) Work performed by any worker under terms and conditions
that seriously or repeatedly violate laws of the jurisdiction
within which the work is performed governing:
(A) Wages;
(B) Employee benefits;
(C) Health and safety, including, but not limited to, exposure
to hazardous toxic substances;
(D) Labor, including, but not limited to, collective bargaining
rights;
(E) Environmental conditions;
(F) Nondiscrimination, harassment, intimidation or retaliation,
including, but not limited to, all laws prohibiting workplace and
employment discrimination;
(G) Freedom of association; or
(H) Building or fire codes.
(b) Any work performed by any individual contributing to the
provision of goods to this state under a contract or subcontract
that constitutes foreign convict or forced labor, abusive forms
of child labor or slave labor.
(8) 'Worker' means any employee of a contractor or
subcontractor who contributes to the provision of goods to this
state under a contract or subcontract, including, but not limited
to, any manufacturing or assembling of goods. + }
SECTION 2. { + Policy. The procurement practices of the State
of Oregon shall support contractors that do not maintain
sweatshop labor working conditions, as further described in
sections 1 to 8 of this 2007 Act. + }
SECTION 3. { + Contractor requirements; prohibition of
sweatshop conditions. Each contractor and subcontractor shall
comply with the following requirements:
(1) Each contractor and subcontractor, regarding any worker,
shall comply with all human and labor rights and labor standards
imposed by treaty or law on the country in which the goods are
made or assembled and may not engage in sweatshop labor.
(2) Each contractor and subcontractor shall pay at least the
following minimum wages:
(a) To workers working in the United States, a base hourly
wage, to be set and adjusted annually by the Director of the
Oregon Department of Administrative Services, to produce for
2,080 hours worked an annual income equal to or greater than the
most recent poverty guidelines of the United States Department of
Health and Human Services for a family of three, plus an
additional 20 percent of the wage level paid including, but not
limited to, amounts paid as hourly wages or health benefits; and
(b) For workers working in countries other than the United
States, a wage, to be set and adjusted annually by the director,
that is comparable to the wage for domestic manufacturers
established in paragraph (a) of this subsection, adjusted to
reflect the country's level of economic development by using the
World Bank's most recent gross national income per capita
Purchasing Power Parity index.
(3) All contractors and subcontractors shall comply with the
overtime laws and regulations applicable to their workers. All
overtime hours shall be worked voluntarily.
(4) A contractor or subcontractor may not subject any worker to
any physical, sexual or other illegal harassment or abuse,
including corporal punishment, illegal discrimination or
retaliation for exercising the worker's right to free speech and
assembly or other rights protected under applicable labor or
employment laws.
(5) A contractor or subcontractor may not require or compel any
worker to use contraceptives or take pregnancy tests.
(6) Contractors and subcontractors shall respect workers'
rights to freedom of association and collective bargaining. A
contractor or subcontractor may not subject a worker to
harassment, discrimination, intimidation or retaliation as a
result of the worker's efforts to freely associate or bargain
collectively. This subsection does not apply to contractors or
subcontractors subject to the National Labor Relations Act (29
U.S.C. 151 et seq.). + }
SECTION 4. { + Contractor requirements; reporting and
verification. (1) Each contractor and subcontractor shall
maintain weekly certified payroll records for submission to the
Director of the Oregon Department of Administrative Services upon
demand. The contractor is responsible for submitting the payroll
records of its subcontractors, although subcontractors shall
submit such records directly to the director upon request. All
certified payroll records shall be accompanied by a statement
signed by the contractor, or subcontractor if requested by the
director to submit the records, stating that the records are
complete and correct. The records shall include the following for
each worker:
(a) Name and job classification;
(b) A general description of the work the worker performed each
day and the rate of pay, including rates of contributions for or
costs assumed to provide fringe benefits;
(c) The daily and weekly number of hours worked;
(d) Deductions made; and
(e) Actual wages paid.
(2) Each contractor and subcontractor shall keep or cause to be
kept for a period of not less than three years from the date of
the expiration or termination of the term of the contract basic
payroll and time records for each worker and copies of any tax
records filed with a governmental entity during the term of the
contract.
(3) Before commencing any work under the contract, the
contractor shall provide the director a list of names and
addresses of each subcontractor to be used in the performance of
the contract, the amount to be paid to each subcontractor, the
contractor's and each subcontractor's applicable state tax
identification number and the address of each manufacturing
facility or other facility or operation of the contractor and its
subcontractors for the performance of the contract.
(4) Each contractor and subcontractor shall cooperate fully
with any investigation of the director, including, but not
limited to, any investigation by an independent nonprofit monitor
or personnel of the Oregon Department of Administrative Services
authorized to assist in the implementation, administration or
enforcement of sections 1 to 8 of this 2007 Act. In the
performance of investigative duties, the director has the right
to make random inspections of any worksite where the contract or
any subcontract is performed and to access to any worker or any
record required to be maintained by this section.
(5) Each contractor and subcontractor shall be responsible for
ensuring the subcontractor's compliance with sections 1 to 8 of
this 2007 Act.
(6) During each year of the term of a contract, the department
may request written assurance from the contractor and each of its
subcontractors that the contractor or subcontractor is in
compliance with sections 1 to 8 of this 2007 Act. The request may
seek confirmation of compliance with some or all of the
requirements of sections 1 to 8 of this 2007 Act and may require
the response to be submitted under penalty of perjury. The
contractor or subcontractor shall provide the written assurance
within the time period specified by the department, which may not
be less than 14 calendar days from receipt of the request. + }
SECTION 5. { + Administration and enforcement by the state.
(1) Each contract shall include an agreement by the contractor to
comply with the requirements of sections 1 to 8 of this 2007 Act
and shall incorporate sections 1 to 8 of this 2007 Act by
reference. Contracts shall provide that:
(a) In the event the Oregon Department of Administrative
Services determines that any contractor or subcontractor has
failed to comply with any provision of sections 1 to 8 of this
2007 Act or any rule implementing sections 1 to 8 of this 2007
Act, the contractor is liable for liquidated damages equal to the
greater of $1,000 or 20 percent of the amount of the goods
provided in violation of sections 1 to 8 of this 2007 Act, as
determined by the department; and
(b) The department may deduct any liquidated damages owed by a
contractor from any moneys owed the contractor under the contract
or any other agreement that the contractor has with the state.
(2) The department shall post the names, addresses and facility
address information submitted from contractors and subcontractors
as described in section 4 (3) of this 2007 Act on its website
before a contractor or any of its subcontractors may commence
work under the contract.
(3) Unless the department is able to adequately monitor
compliance with sections 1 to 8 of this 2007 Act using department
personnel and regulatory procedures, the department shall,
subject to available funding and procurement laws and rules,
enter into an agreement with an independent nonprofit
organization with expertise in monitoring and reporting on
sweatshop labor for assistance in monitoring the compliance of
contractors.
(4) Any failure of a contractor or subcontractor to perform in
accordance with sections 1 to 8 of this 2007 Act shall be a
material breach of contract. In that event, the department may
take any or all of the following actions:
(a) Assess liquidated damages as provided for in the contract.
(b) Terminate the contract with 30 days' notice.
(c) Withhold payments under the contract until the contractor
or its subcontractor is in full compliance with sections 1 to 8
of this 2007 Act.
(d) Require the contractor or subcontractor, at its expense, to
provide training and best practices guidelines to managers and
workers at the facility or operation where the violation occurred
to ensure future compliance.
(e) Require the contractor or subcontractor to provide
department personnel authorized to assist in the administration
and enforcement of sections 1 to 8 of this 2007 Act immediate
access to the facility or operation where the violation has
occurred for an inspection of the facility or operation and
records and for interviews of workers.
(f) During the term of the contract, but not more than once
every 30 days, require the contractor or subcontractor to provide
a written summary of the steps taken to remedy the noncompliance
and any difficulties encountered in resolving the noncompliance.
The request may require the responses to be submitted under
penalty of perjury. The contractor or subcontractor shall provide
the written summary within the time period specified by the
department, which may not be less than 14 calendar days from
receipt of a request.
(g) Pursue any other remedies available to the department at
law or in equity.
(5) The department should endeavor to establish working
relationships with other public bodies working on nonsweatshop
labor procurements. This may include collaboration to the extent
of entering into an agreement to share the cost burden of hiring
independent nonprofit monitors to ensure compliance of
contractors, subject to rules regarding intergovernmental
agreements. + }
SECTION 6. { + Advisory group. (1) The Director of the Oregon
Department of Administrative Services shall establish a Sweatfree
Procurement Advisory Group composed of three members appointed by
the director as follows:
(a) One member who is an advocate for workers' rights, is
knowledgeable and experienced with sweatshop labor working
conditions and participates in national or international efforts
regarding the elimination of sweatshop labor practices.
(b) One department staff member who is familiar with public
procurement rules, the department's procurement activities and
state statutes and policies in general that affect the
department's procurement procedures.
(c) One member who has significant experience in finance,
financial auditing or accounting for public agencies.
(2) The advisory group shall:
(a) Evaluate the industries engaged in the manufacture and sale
of goods to determine whether contracts for any goods, in
addition to apparel and garments, should be targeted for
enforcement.
(b) Evaluate the implementation, administration and enforcement
of sections 1 to 8 of this 2007 Act.
(c) Provide periodic reports to the director and the Governor
on the implementation, administration and enforcement of sections
1 to 8 of this 2007 Act. Reports should be submitted no less
frequently than once every two years.
(3) To determine whether a particular good should be targeted
for enforcement under sections 1 to 8 of this 2007 Act, the
advisory group shall consider factors including, but not limited
to:
(a) The amount the department has spent, and anticipates
spending, for the good;
(b) Evidence of sweatshop labor or other conditions prohibited
by sections 1 to 8 of this 2007 Act in the manufacturing,
assembly or distribution of the good; and
(c) Any financial impact that targeting the good for
enforcement will have on this state.
(4) The advisory group shall submit its recommendation
concerning other commodities for enforcement to the director, who
may then submit the recommendation to the Governor for
approval. + }
SECTION 7. { + Exceptions. Sections 1 to 8 of this 2007 Act do
not apply when:
(1) A contract involves the expenditure of state funds, and the
application of sections 1 to 8 of this 2007 Act would violate or
be inconsistent with the terms or conditions of the applicable
grant agreement, subvention or agreement, or the instructions of
an authorized representative of an agency with respect to the
grant agreement, subvention or agreement.
(2) The Director of the Oregon Department of Administrative
Services determines that there is only one responsible contractor
available to provide the goods and that contractor is unable to
comply with this policy, or the state agency seeking to enter
into the contract certifies in writing to the director, and the
director finds, that there are no qualified responsive bidders or
proposers or prospective contractors that would comply with the
requirements of sections 1 to 8 of this 2007 Act and the contract
is for goods that are essential to this state or the public.
(3) The contract is with a public body.
(4) The acquisition of goods is only incidental to other
purchases under the contract. The acquisition of goods is
incidental if the amount paid by the department or state agency
for the goods is 10 percent or less of the total amount of the
contract.
(5) The contract is an emergency procurement as defined in ORS
279B.080 and the department or state agency recommending the
contract certifies in writing to the director that no entity that
complies with the requirements of sections 1 to 8 of this 2007
Act and is capable of responding to the emergency is immediately
available. + }
SECTION 8. { + Preemption. (1) Sections 1 to 8 of this 2007
Act specify a minimum level of compensation to be paid to workers
and may not be construed to preempt or otherwise limit any other
applicable law, rule or requirement that requires a higher level
of compensation.
(2) Nothing in sections 1 to 8 of this 2007 Act may be
interpreted or applied so as to create any power or duty in
conflict with any federal law. Nothing in sections 1 to 8 of this
2007 Act may be interpreted to preempt any law of a local
government, as defined in ORS 174.116, or a special government
body, as defined in ORS 174.117. + }
SECTION 9. { + Policy phase-in. During the first two full
fiscal years after the effective date of this 2007 Act, the
Oregon Department of Administrative Services may target for
enforcement only contracts for apparel, garments and
corresponding accessories. Agreements for other goods shall be
reviewed for enforcement in accordance with the procedure set
forth in section 6 of this 2007 Act. + }
SECTION 10. { + Sections 1 to 8 of this 2007 Act are added to
and made a part of ORS chapter 279A. + }
SECTION 11. { + Sections 1 to 9 of this 2007 Act apply only to
public contracts entered into on or after the effective date of
this 2007 Act. + }
SECTION 12. { + The section captions used in this 2007 Act are
provided only for the convenience of the reader and do not become
part of the statutory law of this state or express any
legislative intent in the enactment of this 2007 Act. + }
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