Legal News

12-Sep-2022

Learn All About The Supply Chain Compliance Laws In The USA

The laws and regulations that govern supply chains become more complex every year. In the United States alone, there are currently thousands of laws and regulations that apply to supply chain management. These regulations come from a variety of sources: federal government agencies, state government agencies, industry associations, non-profit advocacy organizations, and vendors in the marketplace. These laws and regulations cover everything from how goods can be produced (e.g., fair labor practices) to where goods must be shipped (e.g., hazardous waste disposal standards).

Some focus on how businesses can operate (e.g., anti-discrimination legislation), while others address more specific operational requirements (e.g., labeling standards). If you’re an organization operating in the USA or a supplier selling goods to an organization based in the USA, you must understand what these laws and standards require so that your supply chain remains compliant at all times. Learn more about five key compliance challenges facing suppliers and buyers today.

Data Protection and Privacy Legislation

Organizations that operate within the USA are required to comply with a variety of data protection and privacy standards, including the EU General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). While these regulations often have similar requirements, there are subtle differences to consider. For example, the GDPR has a broad jurisdictional reach, applying to all organizations that process data on individuals in the EU, regardless of where the organization is headquartered.

However, the CCPA applies only to organizations that collect data on Californians. The GDPR and CCPA both require that organizations have a data protection compliance program in place. These programs are designed to ensure that all data is handled in a way that respects individuals’ privacy rights. As part of this program, organizations must be able to show that they have taken reasonable steps to protect individuals’ data. This includes having strong data security controls in place as well as an incident response plan to address breaches when they occur.

Environmental Regulations

There are a variety of federal environmental regulations that govern suppliers’ compliance with environmental regulations. These include the Clean Air Act, Clean Water Act, and Toxic Substance Control Act, among others. In addition, there are several state environmental regulations that suppliers may also be required to comply with. There are also a variety of voluntary standards available in the marketplace, including the Responsible Purchasing Practices program and the Sustainable Supply Chains initiative. These regulations and standards apply to a wide range of operational aspects within the supply chain, including wastewater management, energy use, greenhouse gas emissions, hazardous materials handling, and more.

Organizations need to understand the environmental requirements applicable to their industry as well as their particular role within the supply chain. For example, a manufacturer may have different environmental compliance obligations than a retailer selling the manufacturer’s goods. It’s also important for organizations to understand their role in the supply chain. A supplier at any point in the supply chain can create environmental impacts. Thus, organizations need to consider the environmental impacts created at all points throughout the supply chain.

Labor Laws and Standards

While many people think of labor laws as applicable only to workers employed directly by organizations, there are a variety of labor laws that apply to suppliers as well. Suppliers are independent contractors that provide goods or services to your organization. Suppliers can be individuals or businesses, domestic or international. Suppliers are covered by labor laws if they employ individuals who work in the United States. The laws that cover suppliers are the Fair Labor Standards Act (FLSA), Occupational Safety and Health Act (OSHA), National Labor Relations Act (NLRA), and Contract Work Hours and Safety Standards Act (CWHSSA).

Suppliers must abide by all applicable laws, even if their contract with the organization does not require them to provide a benefit to their employees. At the federal level, a few key labor laws to consider are the Fair Labor Standards Act (FLSA), the Occupational Safety and Health Act (OSH Act), and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). There are also a variety of labor laws at the state level that may apply to suppliers. There are several labor standards in the marketplace, including the Ethical Trading Initiative, Fair Trade, and FLA, among others. Similarly to environmental regulations, suppliers can have significant impacts on labor practices in their supply chains. Thus, organizations need to consider labor practices throughout their supply chains.

Food Safety Legislation

There are a variety of food safety regulations that apply to food suppliers. At the federal level, the primary regulation is the Federal Food, Drug, and Cosmetic Act (FFDCA). There are also a variety of food safety regulations at the state level. In addition, the Marketplace Rule applies to food suppliers that sell goods through marketplace channels, such as online vendors. The FFDCA and Marketplace Rule require that food suppliers have food safety management systems (FSMS) in place. An FSMS is similar to a quality management system. It’s a documentation system that shows how an organization manages food safety risks. An FSMS helps suppliers identify and control food safety hazards, such as microbial contamination, chemical contamination, allergens, and toxins. It also helps suppliers identify preventive controls, such as good hygiene practices and food safety testing procedures.

Equal Opportunity and Anti-Discrimination Legislation

There are a variety of anti-discrimination laws that apply in the USA. At the federal level, the primary anti-discrimination law is the Civil Rights Act. There are also a variety of anti-discrimination laws at the state level. In addition, there are a variety of non-profit organizations and industry associations that promote equal opportunity in the marketplace. The Civil Rights Act requires that organizations do not discriminate against individuals in hiring practices and other aspects of employment. This includes making sure any employment ads are non-discriminatory, following rules about hiring only people eligible to work in the United States, and not discriminating against workers based on any protected traits, such as race, gender, religion, disability status, or sexual orientation.

Employers must also accommodate workers with disabilities, if necessary, and maintain a non-discriminatory workplace. In addition, they must provide reasonable accommodation to individuals with disabilities. There are also a variety of other anti-discrimination laws that require organizations to provide equal opportunities to individuals in a variety of situations, such as housing, access to goods and services, and more.

Conclusion

There are many challenges associated with supply chain compliance. At the federal level, there are more than 20 regulatory agencies that have law-making authority. In addition, thousands of state and local government agencies also have law-making authority. This creates a complicated environment for supply chain compliance. This complexity creates significant challenges for organizations, both buyers and suppliers, as they work to stay compliant with the myriad laws and regulations that apply in the supply chain. Fortunately, there are a variety of resources available to support compliance efforts.

In particular, organizations can use technology to help manage compliance efforts throughout their supply chain. This can be done through the use of blockchain technology that records every transaction throughout the chain or by setting up compliance rules that must be met before goods can be moved. By using technology to monitor their supply chain, companies can reduce the risk of non-compliance, as well as the costs of non-compliance.