Child labor: Why “hot goods” are bad for business
Employers that provide goods or services while violating the federal Fair Labor Standards Act’s (FLSA) child labor laws, might find such goods or services halted in the supply chain.
Recently, the U.S. Department of Labor’s Wage and Hour Division (WHD) investigated a sawmill after a 16-year-old worker died. The WHD invoked the “hot goods” provision of the FLSA.
Hot goods
Hot goods are those businesses produced in or about where oppressive child labor occurred. The FLSA broadly defines “oppressive child labor” and includes any violation of the WHD’s child labor regulations and orders (29 C.F.R. Part 570).
If oppressive child labor occurred “in or about” an establishment, then the products made at that establishment might be “hot” regardless of whether the children in question worked directly with the goods themselves.
Employers may not ship those hot goods in interstate commerce. They just sit on the dock.
When found, the WHD might ask that the business to voluntarily refrain from shipping the goods until the business remedies the violation.
If the business does not voluntarily withhold goods from shipment, the WHD might file a civil action in U.S. District Court to stop the shipment, including through a temporary restraining order, preliminary injunction, or permanent injunction.
Don’t do this
The FLSA forbids any producer, manufacturer, or dealer from shipping or delivering for shipment in interstate commerce hot goods removed from the producing establishment in the 30 days after a child labor violation.
The employers who initially make the products with child labor are not the only ones prohibited from shipping the products. Rather, any producer, manufacturer, or dealer who later receives them is also at risk.
The hot goods enforcement provision helps the WHD ensure that the work is safe and does not jeopardize minors’ health, well-being, or educational opportunities.
Downstream
The FLSA also prevents subsequent downstream shipment of such goods if the business removed them from the producing establishment in the 30 days following a child labor violation.
The WHD has the authority to seek a court order compelling any downstream producers, manufacturers, or dealers in possession of the goods to stop shipment. It can, therefore, notify anyone who might receive or purchase the hot goods that further shipment of those items could violate the FLSA.
The WHD might assess civil money penalties and also seek other remedies, including enhanced compliance terms, before lifting objections to the shipment of hot goods.
Key to remember: Employers that violate the Fair Labor Standards Act child labor provisions could have consequences to their bottom line if the U.S. Department of Labor stops them from shipping their wares.