What is the Supply Chain Act
The Supply Chain Due Diligence Act has been fully in force since 1 January 2024 (Supply Chain Act or LkSG for short). This means that not only companies with at least 3,000 employees are now covered. A much lower limit now applies: all companies with at least 1,000 employees are covered. This also includes foreign companies that operate a branch office in Germany and employ at least 1,000 employees in Germany.Not only the individual company is considered. In the case of affiliated companies, the employees working in Germany of all companies belonging to the group are to be taken into account in the number of employees of the parent company. Temporary workers must be taken into account if they have been employed for at least 6 months. Due to these far-reaching attribution rules, numerous larger SMEs are also covered by the Supply Chain Act. Labour-intensive companies, such as hospitals or care facilities, are particularly affected.
The Supply Chain Act imposes very far-reaching obligations on companies with the aim of avoiding violations of human rights risks in the supply chain. Human rights risks include child labour, discrimination based on gender, age or religion, compliance with occupational health and safety regulations, slavery and forced labour. The law also covers environmental risks. These include, for example, the ban on depriving people of their livelihoods.
