Businesses with financial year-ends falling on 31 March 2016 onwards will be required to publish their annual modern slavery statement for the previous financial year.

The requirement in section 54 of the Modern Slavery Act 2015 applies to commercial organisations supplying goods or services in the UK (though not necessarily based in the UK) with an annual turnover of £36 million or more.

The statement must either: (i) detail the steps taken by the organisation to ensure that slavery and human trafficking is not taking place in any part of its business or supply chain; or (ii) explain that no such action was taken.

You can find out more about the technical details and top tips for how to comply from our legal update from October 2015.

The intention is to move beyond catching the principal offenders by ensuring that consumers and businesses do not inadvertently fuel the demand for slave labour. Commercial organisations face significant reputational risks if they opt for a statement that no action has been taken.

Businesses caught by section 54 should already be on their way to complying with the requirement. Indeed, a number of companies have already published their statement before 31 March. However, recent analysis from the Core Coalition and the Business & Human Rights Resource Centre shows that a large number of these early statements have either failed to comply with section 54 or deviate substantially from the UK government's guidance.

For example, almost two-thirds of statements already published were not signed by a director and made available via a prominent link on the company's homepage on its website, as required by subsections (6) and (7) of section 54.

For those businesses that have not begun to think about complying, the time to do so is now. The UK government's guidance states that statements should be published as soon as reasonably practicable after the year end (no later than 6 months) to ensure that the information is not out of date.

If you would like to discuss the impact of the Modern Slavery Act on your business please contact Paul Marshall, our Head of Business Ethics.