Migrant workers play a vital role in global industries such as construction, manufacturing, agriculture, and fisheries. Yet, many remain highly vulnerable to exploitation and abuse, largely due to weak legal protections, poor oversight of recruitment processes, and power imbalances between workers and employers. According to the International Labour Organization (ILO), forced labour is three times more prevalent among migrant workers[1], with recruitment fees and related costs often leading to debt bondage –one of the 11 ILO indicators of Forced Labour.
Despite international efforts and growing awareness of these risks, migrant worker-paid recruitment fees remain widespread, especially in key manufacturing hubs in Asia. According to the ILO[2], an estimated $5.6 billion in illegal profits are generated annually from recruitment fees and related costs imposed on migrant workers, fueling forced labor and debt bondage. As Western companies in the apparel and electronics sectors relocate or expand production to countries such as Thailand, Malaysia and Taiwan – driven by tariffs and global trade disruptions – these risks are exacerbated. The increased reliance on migrant labor in these regions, where recruitment fee abuses are well-documented, heightens the vulnerability of workers to exploitation and excessive costs.
Many brands, particularly those previously reliant on mainland Chinese suppliers now shifting operations to Southeast Asia, may lack the experience, knowledge, or capacity to identify and address migrant worker risks – including recruitment fee practices – or to conduct effective due diligence and vet labour agents. Rapid expansion often means that robust due diligence, worker support systems, and training are not yet embedded, further increasing the risk of worker exploitation and unethical recruitment practices.
To mitigate these risks, several companies have established ‘zero recruitment fee’ policies, which seek to ensure that migrant workers in their value chains do not pay fees or costs for their jobs. Despite these commitments, migrant worker-paid recruitment fees remain prevalent – and in some cases, the norm – across many countries.
The risks of non-compliance are significant. Since 2019, U.S. Customs and Border Protection has issued import bans (withhold release orders) against companies linked to forced labour involving debt bondage from recruitment fees. Additionally, emerging legislation such as the EU’s Corporate Sustainability Due Diligence Regulation is increasing pressure on companies to identify and remediate forced labour risks in their supply chains. Industry groups, such as the American Apparel and Footwear Association (AAFA), are now driving collective action and best practice sharing to address these challenges, recognizing that no single company can solve these systemic issues alone.
Real action with our clients
LRQA has been helpling companies to investigate and respond to forced labour risks arising from migrant worker-paid recruitment fees for many years. Our clients range from global brands to local operations. We have worked with them to identify and investigate the amount of fees being paid and carefully implemented measures to not only prevent continued payment of recruitment fees in their suppliy chians, but remediate these situations once found. As a result, since 2021, LRQA has supported companies to investigate and repay over US$70 million in recruitment fees to over 42,000 migrant workers worldwide.
At LRQA, we partner closely with our clients to identify, mitigate and prevent recruitment-fee-related risks in their operations and supply chains. We understand each client’s specific risk landscape, supply chain structure and current due diligence maturity to tailor responsible recruitment strategies and investigations to align with international standards and our clients’ operational realities. Drawing on over a decade of experience, LRQA offers key insights and recommendations for companies to effectively address recruitment fee risks and protect migrant workers.
[1] ILO and Walk Free (2022) Global Estimates of Modern Slavery
[2] ILO (2024) Global Study on Recruitment Fees and Related Costs, Second Edition
What Businesses Can Do
- Conduct an Independent Third-Party Investigation
Recruitment fees are often undocumented, and workers may fear retaliation, making detection challenging – particularly in sourcing destinations Asia. Companies should commission specialized investigations or assessments that focus specifically on recruitment fees rather than relying on general social compliance audits. Effective investigations use trusted, independent interviewers who speak the workers’ language and conduct private, confidential interviews with statistically significant samples. - Use Smart Benchmarks
Benchmarking data from thousands of migrant worker interviews across Asia helps anticipate expected recruitment fee levels and validate investigation findings. However, benchmarks should guide rather than replace direct worker interviews, as fees vary by recruitment corridor, date, and agency involved. - Taking a Holistic Approach to Repayment and Prevention
Repayment of recruitment fees is only one part of remediation. Companies must address root causes by implementing robust responsible recruitment systems aligned with international standards (e.g., ILO, Dhaka Principles). This includes selecting trustworthy agencies through thorough due diligence, paying the true cost of recruitment (including premiums for ethical practices), continuous monitoring throughout the recruitment lifecycle, removing intermediaries where possible, establishing accessible grievance channels, and having clear remediation plans for repayment.
How LRQA Can Help?
LRQA supports businesses with a comprehensive suite of services designed to detect, remediate and prevent recruitment fee exploitation:
- Responsible Recruitment Program Design
LRQA supports companies in developing systems that go beyond zero-fee policies, embedding compliance and ethical recruitment practices into their operations. This includes tailored assessments of internal recruitment systems and programs, responsible recruitment training, capacity building, verification, and implementation of recommendations. - Specialized Recruitment Fee Investigations
LRQA carries out targeted investigations to uncover and quantify recruitment fees paid by workers, enabling accurate remediation rather than relying on routine social compliance audits. Our approach ensures risk visibility across specific recruitment corridors, helping businesses take informed corrective actions. - Repayment and Remediation Support
Building on proven success, we support companies in designing and implementing effective repayment and remediation plans, including determining how much will be repaid, when repayments will occur, and who is responsible. Our approach ensures that repayment processes are fair, transparent, and aligned with workers’ rights. - Grievance Mechanisms Implementation
We help companies establish accessible, confidential and culturally appropriate grievance channels to safely report recruitment issues. Through channels such as the Suara Kami helpline, available in countries like Malaysia, Indonesia, India, Nepal, and Bangladesh, workers can raise concerns at all stages of recruitment – from pre-departure to employment.
As companies expand sourcing into new locations, the risks of migrant worker exploitation – especially through recruitment fees are significant and evolving. Collective industry action, robust due diligence and expert support are essential to ensure ethical recruitment and compliance with global standards.
We can help. Contact us to learn how LRQA can support your responsible recruitment journey.