Modern Slavery Law In Australia: Essential Compliance Guide For Businesses

Modern slavery risks aren’t limited to overseas factories or far‑flung supply chains. Australian businesses of all sizes can be exposed - whether through direct operations, labour hire, or deeper tiers of suppliers.

The good news? With a practical plan, clear contracts and ongoing due diligence, you can meet your obligations and build a responsible, resilient supply chain.

In this guide, we break down Australia’s modern slavery laws in plain English, who must report, and the steps any business can take to manage risk and stay compliant.

What Is Modern Slavery Law In Australia?

Australia’s framework is led by the Modern Slavery Act 2018 (Cth). It requires certain larger entities to publish an annual modern slavery statement and encourages all businesses to assess and address risks in their operations and supply chains.

Modern slavery includes severe forms of exploitation such as forced labour, debt bondage, human trafficking, forced marriage, deceptive recruiting for labour or services, and the worst forms of child labour. The focus is on serious exploitation, not general poor working conditions - though those can be indicators of risk.

How The Federal Regime Works

• Scope: The Act applies to “reporting entities” (explained below) that are Australian entities or carry on business in Australia.
• Annual statement: Reporting entities must submit an annual statement addressing prescribed criteria, including identified risks, due diligence and remediation steps, effectiveness, and consultation with owned or controlled entities.
• Public register: Statements are published on the government’s online register, creating transparency and market accountability.

What About The NSW Modern Slavery Act?

New South Wales also has the Modern Slavery Act 2018 (NSW). It primarily targets NSW public sector agencies and related entities. For private sector businesses, the Commonwealth Act sets the key reporting and disclosure obligations you’ll need to consider.

Are Reforms Coming?

Following a statutory review, the Federal Government has considered proposals such as introducing civil penalties for non‑compliance, a mandatory due diligence obligation, and lowering the reporting threshold. These reforms have been proposed but are not law at the time of writing. It’s wise to build your program to best‑practice standards now so you’re future‑ready.

Who Has To Report Under The Modern Slavery Act?

Entities with consolidated annual revenue of at least $100 million must report. This includes Australian entities and foreign entities carrying on business in Australia.

Working Out Your Revenue Threshold

• Consolidated revenue: Assess revenue at the group level (including controlled entities), not just the standalone company.
• Groups can report jointly: If you’re part of a corporate group, multiple entities may each be reporting entities. You can submit a joint statement for the group if the criteria are met.

What Must The Statement Include?

Your modern slavery statement needs to address the mandatory criteria in the Act. In summary, cover:

• Your structure, operations and supply chains.
• Modern slavery risks in your operations and supply chains (including deeper‑tier suppliers where relevant).
• Actions taken to assess and address those risks, including due diligence and remediation processes.
• How you assess the effectiveness of those actions.
• How you consult with entities you own or control.
• Any other relevant information.

Timing And Approval

• Deadline: Statements are generally due within six months after the end of your reporting period.
• Approval: Your principal governing body (for example, the Board) must approve the statement, and a responsible member must sign it.
• Publication: Submit your statement via the government’s online portal so it appears on the public register.

Not a reporting entity? Many customers - including large corporates and government buyers - now expect modern slavery controls from all suppliers. Taking action now will help you meet procurement requirements and protect your brand.

Practical Compliance Steps For Non‑Reporting Businesses

Even if you’re under the $100m threshold, modern slavery risk management is fast becoming standard business practice - and a competitive differentiator in tenders and supply chains.

At a minimum, consider these building blocks:

• Risk assessment: Map your operations and immediate suppliers. Prioritise higher‑risk sectors (for example, apparel, agriculture, construction, cleaning, logistics) and locations.
• Supplier onboarding: Ask targeted questions about labour practices, subcontracting and recruitment fees. Request documentary evidence where appropriate.
• Contract controls: Include ethical sourcing obligations, audit/inspection rights, subcontractor controls and corrective action plans in your contracts. A clear, up‑to‑date Supply Agreement and robust Terms of Trade go a long way.
• Training and awareness: Provide practical training to procurement, operations and site managers so they can spot risk indicators and escalate early.
• Grievance and escalation: Offer safe channels for workers in your operations and supply chain to raise concerns. Make sure reports are investigated and resolved.
• Documentation: Keep clear records of your risk assessments, supplier questionnaires, audits, training and any remediation activities.

When a customer or prime contractor sends you a supplier questionnaire or code of conduct, you’ll be ready to respond with evidence of your controls.

Step‑By‑Step: How To Build A Modern Slavery Compliance Program

Whether you’re a reporting entity or building a scalable program as an SME, this approach will help you cover the essentials without over‑engineering your system.

1) Understand Your Footprint

• Map operations: List your business sites, services and labour models (employees, contractors, labour hire).
• Map supply chains: Identify direct (Tier 1) suppliers and, where feasible, key Tier 2 suppliers for higher‑risk categories such as uniforms, packaging, cleaning and seasonal labour.

2) Assess Inherent Risks

• Sector and geography: Cross‑check your categories against known risk indicators (low‑skilled or seasonal workforces, high‑migration corridors, or regions with weak labour protections).
• Business model pressures: Tight deadlines and low pricing can push risky subcontracting or recruitment practices - acknowledge those pressures and plan around them.

3) Prioritise And Plan Controls

• Risk‑based focus: Start with the highest‑risk categories and suppliers and sequence your rollout.
• Controls mix: Combine contractual obligations, supplier questionnaires, independent certifications, site visits (where proportionate) and worker interviews for higher‑risk scenarios.

4) Strengthen Your Contracts

Contracts set expectations and give you levers to act if issues arise. Build (or update) your supplier and service agreements to include:

• Compliance warranties with modern slavery laws and your supplier code of conduct.
• Prohibitions on recruitment fees, retention of personal documents and unapproved subcontracting.
• Audit/verification rights and cooperation duties.
• Corrective action plans, termination for material non‑compliance, and clear remediation commitments.

Often the quickest way to lift standards is by refreshing your baseline Supply Agreement and standard Terms of Trade, and ensuring that services involving labour are covered by a clear Contractor Agreement.

5) Onboard Suppliers With Due Diligence

• Questionnaires: Ask about labour sourcing, dormitory conditions, subcontracting tiers and grievance mechanisms.
• Evidence: Request sample payslips, policy documents and certifications where proportionate to the risk.
• Escalation: Define triggers for enhanced due diligence, such as red flags or higher‑risk geographies.

If you’re new to structured reviews, targeted supplier checks or a tailored Legal Due Diligence Package can save time and ensure you ask the right questions.

6) Train Your Team And Key Suppliers

• Practical content: Focus on risk indicators (with real‑world examples), interviewing tips and what to do if someone raises a concern.
• Regular refresh: Align training cycles with annual planning and staff turnover, and include new or higher‑risk suppliers where appropriate.

7) Create Safe Reporting Channels

• Whistleblowing: Provide a confidential, accessible mechanism for your workers - and supply chain workers - to report concerns. A compliant Whistleblower Policy helps you set this up correctly.
• Grievance pathways: Offer multiple channels (including anonymous options if possible) and publish them in supplier documents and on‑site materials.

8) Respond And Remediate

• Investigate promptly: Prioritise safety and confidentiality. Engage competent investigators where appropriate.
• Remediation first: Protect affected workers (for example, repayment of illegal fees, safe exit options, and access to support) - termination is a last resort.
• Learn and improve: Update your risk assessment and controls based on what you learned.

9) Monitor And Report

• KPIs and dashboards: Track supplier screening rates, training coverage, issues raised and resolved, and audit outcomes.
• Annual statement (if applicable): Collate data and prepare your statement for governing body approval and submission to the public register.

Contracts, Policies And Records You’ll Likely Need

The right mix depends on your size, sector and risk profile. These “core” documents are common building blocks across industries:

• Supply Agreement: Sets ethical sourcing obligations, audit rights, subcontractor controls, corrective action plans, and termination for serious breaches. Consider a tailored Supply Agreement so expectations are clear from day one.
• Terms Of Trade: Useful when you supply goods or services at scale; include modern slavery and chain‑of‑responsibility clauses in your standard Terms of Trade.
• Contractor Agreement: Clarifies obligations for labour providers and subcontractors and helps prevent risky pass‑through subcontracting. A clear Contractor Agreement is essential where labour is engaged.
• Non‑Disclosure Agreement (NDA): Protects sensitive supplier and audit information you share during due diligence - use a concise Non‑Disclosure Agreement for pre‑contract discussions.
• Whistleblower Policy: Establishes protected reporting channels and investigation processes for serious misconduct and exploitation concerns. A compliant Whistleblower Policy supports safe escalation.
• Privacy documentation: If you handle personal information (for example, worker data from audits or grievances), ensure you meet your obligations under the Privacy Act 1988 (Cth). Many businesses that are “APP entities” (for example, businesses with annual turnover over $3 million, or those caught by specific criteria) must have a publicly available Privacy Policy - others may still choose to implement one as best practice.

You may also embed expectations into your own operations (for example, recruitment, labour hire, and procurement) through a tailored Workplace Policy suite and board‑approved statements. Keep thorough records of risk assessments, supplier responses, audits, and remediation - strong documentation supports tenders and, if you’re a reporting entity, your annual statement.

Quick Answers To Common Questions

Do I Have To Audit Every Supplier?

No. The law expects a risk‑based approach. Start with higher‑risk categories and geographies, then scale proportionately. Use a mix of questionnaires, certifications and targeted site visits where warranted.

What If A Supplier Refuses To Cooperate?

Build cooperation obligations and access rights into your contracts. If issues persist, escalate through corrective action plans and, if needed, consider alternative suppliers. The aim is remediation first, termination last.

We’re Under $100m - Should We Still Publish A Statement?

It’s optional. However, many SMEs publish a short statement or policy to meet customer expectations and tender requirements. Even without a formal statement, keep clear records of your risk assessments and controls so you can demonstrate responsible sourcing.

How Do Modern Slavery Controls Interact With Privacy?

When you handle personal information (for example, during an audit or grievance process), only collect what you need, store it securely, and limit access. If you’re an APP entity (or otherwise required), maintain a current Privacy Policy and align record‑keeping with your broader data governance practices.

Key Takeaways

• Under Australia’s Modern Slavery Act, entities with consolidated revenue of at least $100m must publish an annual statement covering risks, actions and effectiveness.
• Even if you’re not a reporting entity, modern slavery risk management is now standard business hygiene - and often required by customers and procurement teams.
• Build a practical program: map your supply chain, assess inherent risks, strengthen contracts, onboard suppliers with proportionate due diligence, train your team and set up safe reporting channels.
• Let your contracts and policies do the heavy lifting - keep your Supply Agreement, Terms of Trade, Contractor Agreement, Whistleblower Policy and, where required, Privacy Policy aligned with your standards.
• Document everything and review annually - strong records support tenders and, if relevant, your modern slavery statement.
• Reforms have been proposed (including potential penalties and a due diligence duty) but are not yet law - aim for best practice so you’re ready.

If you’d like a consultation on setting up or reviewing your modern slavery compliance program, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.