Child Labor Crisis

Recent Rise in Child Labor Violations

In recent years cases of child labor in the United States have been on the rise, increasing from 1,012 cases in 2015 to 2,876 in 2022.[1] This increase is a worrisome trend, not only because of the numerical rise in cases, but also because there has been a corresponding increase in the number of children found to be working in dangerous conditions.

This year alone, major companies such as Hyundai[2], McDonald’s, General Mills and Frito Lay[3] were found to utilize child labor in their U.S. operations. In some cases the children were working in dangerous environments such as metal stamping plants and commercial baking operations. The victims in these cases are often unaccompanied migrant children, some of whom may be victims of human trafficking. The current spike in cases of child labor in the U.S. can be linked to a variety of factors, such as: the record numbers of unaccompanied migrant children arriving in the U.S., the increased usage of staffing agencies by major corporations to fill workforce gaps, negligible fines for child labor violations, as well as low union density and weak enforcement of existing child labor regulations in the states where these cases occur most frequently.

Widely accepted international standards recognize child labor as a fundamental human rights violation, including the International Labour Organization’s Labour Standards and United Nations’ Global Compact. Furthermore, the United Nations' Guiding Principles on Business and Human Rights (UNGP) provides guidelines for businesses to eliminate human rights abuses throughout their operations and supply chains. In addition, countries around the world have adopted laws prohibiting child labor. In the United States, child labor is federally regulated by the child labor provisions in the Fair Labor Standards Act of 1938.

The second pillar of the UNGP states that corporations have a responsibility to respect human rights and must take steps to identify, address, and prevent human rights abuses, including child labor, within their operations, supply chain, and products or services. There are a number of steps that can be taken in this regard. Corporations should align their policies and processes with the international human rights framework. Corporations must ensure that they have proper monitoring and reporting mechanisms in place to expose adverse human rights impacts. At the board level, corporations should elevate human rights oversight to a board committee. This committee should oversee human rights impact assessments that are conducted regularly, by a qualified third party, and publicly disclosed.

The third pillar of the UNGP states that individuals whose rights are harmed by business must have access to remedy. At its core, the concept of remedy aims to restore individuals or groups that have been harmed by a business’s activities to the situation they would have been in had the impact not occurred. Where this is not possible, it can involve compensation or other forms of remedy that try to make amends for the harm caused.

The five internationally recognized elements of remedy may be used alone or together in the remedy process. Remedies include:

·       Restitution

·       Compensation

·       Rehabilitation

·       Satisfaction

·       Guarantee of Non-Repetition

Engagements

SOC Investment Group engages Hyundai Motors Board after reports of child labor at Alabama suppliers.

Investors Urge McDonald’s Board to Improve Oversight of Child Labor.

Group of investors engage companies following New York Times exposé on child labor.

[1] https://www.npr.org/2023/02/26/1157368469/child-labor-violations-increase-states-loosen-rules#:~:text=In%202015%20%E2%80%94%20the%20low%20point,3%2C876%2C%20averaging%204.6%20per%20case.

[2] https://www.reuters.com/investigates/special-report/usa-immigration-hyundai/

[3] https://www.nytimes.com/2023/02/25/us/unaccompanied-migrant-child-workers-exploitation.html