Social Compliance Audit Reporting

by Jennifer Kaiser

AB 3234 requires employers that voluntarily conduct social compliance audits post a clear and conspicuous* link to the audit report on the company website detailing the company’s compliance with child labor laws.

What is a social compliance audit you ask? According to the bill, it is a “voluntary, nongovernmental inspection or assessment of an employer’s operations or practices to evaluate whether the operations or practices are in compliance with state and federal labor laws, including, but not limited to, wage and hour and health and safety regulations, including those regarding child labor.”

In other words, it’s an examination of a company to assess whether the company behaves in a socially responsible and ethical manner. These audits provide transparency for shareholders, customers, applicants, etc.

The bill lists 6 items that must be included in the audit report such as:

  1. The year, month, day, and time on which the audit was conducted. (The time is important for employers that have day and night shifts.)
  2. Whether the employer used child labor.
  3. A copy of any written policies and procedures regarding minor employees.
  4. Whether the employer exposed children to any workplace situations that may have been hazardous or unsafe to their physical and mental health and development.
  5. Whether children worked within or outside regular school hours, or during night hours.
  6. A statement that the auditor used for the audit is not a government agency and not authorized to verify compliance with state and federal labor laws or other health and safety regulations.

However, it is important to note that this bill has no teeth as it does not mandate that employers conduct social compliance audits, specify a deadline for posting the audit reports, or impose any penalties for noncompliance.

*“Clear and conspicuous” means in larger type than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same size, or set off from the surrounding text of the same size by symbols or other marks that call attention to the language.