Bonded Labor

Bonded labor, also known as debt bondage and peonage, happens when people give themselves into slavery as security against a loan or when they inherit a debt from a relative. It can be made to look like an employment agreement but one where the worker starts with a debt to repay – usually in brutal conditions – only to find that repayment of the loan is impossible. Then, their enslavement becomes permanent.

Bonded labor is designed to exploit workers. The cyclical process begins with a debt, whether acquired or inherited, that cannot be paid immediately. Then, while the worker labors to repay the debt, the employer continues to add on additional expenses. For instance, a laborer may begin with an initial debt of $200. While working and unable to leave, this worker needs a shelter, food and water. The employer tacks on $25 per day to the debt to cover those expenses. Consequently, the employee only grows his debt while continuing to labor for his debtor, and repayment is impossible.

Oftentimes this debt is passed down from generation to generation, making it eerily similar to chattel slavery in the 18th and 19th centuries. It’s seen throughout the world when employers force the children of employees to labor in the same situation as their parents in order to help pay off their parents’ debt or when parents or family members pass away and employers require another body to fill the lost role – all under the pretense of a debt owed.

Bonded labor is used across a variety of industries in order to produce products for consumption around the world.

Migrant laborers are particularly vulnerable to this form of enslavement. In their home countries, migrant laborers contract with labor agencies and employers for a destination country, looking for an economic opportunity. These situations are ripe for exploitation because agencies and employers hold a debt or a bond over these employees. Instead of honoring a genuine term of employment, some recruiters or employers unlawfully exploit the initial debt by adding immigration, housing and other fees that are designed to keep the migrant workers from ever being capable of repayment. In some scenarios, these recruiters and employers confiscate legal immigration documents, making legal employees entirely dependent on them, or require the temporary work in order to maintain their legal status. In other instances, recruiters falsify documents or ignore them altogether, once again making migrant workers vulnerable and dependent. In these situations, workers often fear seeking redress.

Bonded Labor throughout the World

The international Palermo Protocol requires the criminalization of bonded labor as a form of trafficking. Still, this particular system of slavery is deeply entrenched around the world. It’s most common in India, Pakistan, Bangladesh and Nepal. In fact, the majority of the world’s slaves live and work in India in a form of bonded labor.

Bonded Labor in the United States

U.S. law prohibits the use of a debt or similar threat of financial harm as a form of coercion for forced labor. The earliest U.S. legislation outlawed bonded labor under its Spanish name, peonage, which surged following the legal emancipation of U.S. slaves in 1865. Following the Civil War, former slaveholders and white Americans needed labor for their workforce, so they found new ways to force African Americans to work. Whites arrested and charged African Americans and then fined them for their various crimes. Former slaves had little money to afford such fines, so white businessmen forced the emancipated slaves to take on debts in exchange for paying them. These former slaves then had a bond over them, and employers exploited the situation so that the debt could never be repaid.