Steering employer demand away from exploitative employment practices

This working paper analyses policymakers efforts to steer employers away from adopting exploitative employment practices. Within this paper exploitative practices are defined as practices that breach the labour standards including wages, working hours and conditions, social protections among others. The paper looks at how traditional ‘command and control’ labour regulation regimes employ ‘smart’ enforcement approaches to try to improve compliance.
The study focuses on the strategic enforcement approach of the Wage and Hours Division in the US and the use of risk assessments to target inspections by the Gangmasters Licensing Authority in the UK. The emphasis is on how regulators can maximise their impact through better targeted inspections. The analysis includes examples of how both agencies have constructed economic incentives for compliance that work through supply chains to create additional compliance within the sectors they affect.
The operational contrasts between a the two agencies raise pertinent questions for how best to approach regulating employers and how to steer employer behaviour in relation to demand in the field of trafficking in human beings.