Who will be named, and why is this list important? The report, compiled by the California Franchise Tax Board (FTB), will identify all retailers and manufacturers with over $100 million in worldwide gross receipts, based on 2011 tax returns, who “do business in California”. Some companies may be surprised to be included, but the threshold for doing business in California under the law is low, and even companies with minimal contacts in California may come within its reach. Businesses on the list must disclose on their website what steps, if any, they take to mitigate the risk that their products are sourced by forced labor. If they do not, the California Attorney General may seek injunctive relief.
To our knowledge, the Attorney General has not yet sought to enforce the statute against non-complying companies, nor provided guidance on how she intends to proceed in the future. However, on November 30th, when the FTB hands her the list of companies who must make a website disclosure, the Attorney General will more easily be able to identify and target non-compliance. California is taking increasingly aggressive steps against human slavery and trafficking. If your company meets the threshold criteria, but has not yet posted the mandatory disclosure, now is the time!