Modern Slavery Act 2015 Compliance For UK SMEs And Startups

If you’re running an SME or startup, “modern slavery compliance” can sound like something only big multinationals worry about.

But in practice, the Modern Slavery Act 2015 can affect small businesses too - especially if you have a supply chain, use contractors, import goods, scale quickly, or sell to larger organisations that ask you to evidence what you’re doing.

This guide breaks down what Modern Slavery Act 2015 compliance looks like for UK SMEs and startups in the real world: what’s legally required, what’s best practice, and how to set up an approach that’s proportionate (and workable) for a growing business.

This article is general information only and isn’t legal advice. If you need advice on your specific circumstances, speak to a qualified lawyer.

What Is The Modern Slavery Act 2015 And Does It Apply To Small Businesses?

The Modern Slavery Act 2015 is UK legislation aimed at preventing and addressing modern slavery, forced labour and human trafficking. For businesses, the most talked-about part is section 54, often called the “transparency in supply chains” requirement.

Do SMEs Have A Legal Duty To Publish A Modern Slavery Statement?

You are legally required to publish an annual modern slavery statement if your organisation:

• is a commercial organisation (this includes many companies and partnerships),
• supplies goods or services,
• carries on a business (or part of a business) in the UK, and
• has a total annual turnover of £36 million or more (including the turnover of any subsidiaries, where relevant).

If you’re below the turnover threshold, you generally won’t be legally required to publish a statement under section 54.

That said, “not required” doesn’t mean “not relevant”. Many small businesses still need to engage with modern slavery risk because:

• customers (especially larger corporates and public sector bodies) often require you to show modern slavery controls as part of onboarding or tender processes,
• investors and acquirers often ask about ESG and supply chain risk as part of due diligence,
• you may be asked to contractually warrant that you comply with modern slavery laws (even if you’re not producing a statement), and
• reputational damage can be severe if exploitation is found anywhere in your operations or supply chain.

What Counts As “Modern Slavery Risk” For A Startup?

Modern slavery risk isn’t limited to extreme scenarios. It can arise in everyday business models, including:

• using overseas manufacturers, wholesalers or fulfilment providers
• sourcing raw materials with complex tiers of suppliers
• labour-intensive services like cleaning, security, hospitality, construction, logistics, or care
• heavy use of temporary labour or subcontracting chains
• rapid scaling where supplier onboarding is rushed and not documented

Even if your business is small today, building a simple compliance framework early can save you stress later - especially when you hit growth milestones and bigger clients start asking questions.

What Should A Small Business Do If It’s Below The £36m Threshold?

For most SMEs and startups, modern slavery compliance is about risk management and commercial readiness.

In other words: you’re setting up sensible controls so you can confidently answer (and evidence) the question, “What steps do you take to prevent modern slavery in your business and supply chain?”

A Practical “Proportionate Compliance” Approach

If you’re below the threshold, a good, defensible approach usually includes:

• Identifying where risk could sit in your supply chain and workforce model
• Doing basic due diligence on higher-risk suppliers and subcontractors
• Putting expectations in writing in your supplier/customer contracts
• Training your team (even light-touch) so red flags aren’t missed
• Documenting what you did so you can demonstrate it later

This doesn’t need to be complicated. The goal is to create a repeatable process you can scale.

When Small Businesses Get Caught Out

We often see problems where modern slavery risk becomes a blind spot because:

• supplier onboarding is informal (“we found them on a platform and started ordering”)
• there’s no written contract or the terms are silent on compliance
• responsibility is unclear internally (no one “owns” supplier checks)
• HR processes don’t catch vulnerable worker risk (right-to-work checks, recruitment practices, accommodation deductions, etc.)

Having your key relationships documented properly - for example, via a tailored Supply Agreement or Sub-Contractor Agreement - can make it much easier to set expectations and enforce them if something goes wrong.

How Do You Assess Modern Slavery Risk In Your Operations And Supply Chain?

A modern slavery risk assessment for a small business doesn’t have to be a 50-page report. Think of it as a structured way to answer: where are we most likely to be exposed?

Step 1: Map Your Supply Chain (Just Enough)

Start with a simple list of:

• your key suppliers (goods and services)
• where they operate (UK/overseas)
• what they provide (labour-intensive? manufacturing? digital-only?)
• whether they use subcontractors

For many startups, 80% of risk sits with a small number of suppliers. Focus your effort there first.

Step 2: Identify Higher-Risk Categories

Risk tends to increase where there’s:

• low-cost labour pressure (very cheap pricing, tight deadlines)
• complex subcontracting (multiple layers between you and workers)
• cross-border sourcing (different labour standards and enforcement)
• vulnerable worker groups (migrant labour, recruitment fees, debt bondage indicators)
• cash-in-hand / informal work practices

Step 3: Decide What Checks Are “Reasonable” For You

“Reasonable steps” depends on your business size, leverage, and risk profile. For a small business, checks may include:

• confirming the supplier’s business identity and ownership
• asking for policies (modern slavery, ethical sourcing, recruitment practices)
• asking how they vet their own suppliers or labour providers
• checking whether there have been past regulatory issues or credible allegations
• for higher-risk suppliers: requiring audit rights, certifications, or evidence of worker protections

If you handle personal data during onboarding (for example, copies of right-to-work documents, contact details, or background checks), it’s worth aligning your approach with your wider data compliance too - many businesses address this as part of their broader GDPR documentation (for example, by putting the right privacy notices, data processing terms and internal processes in place) so policies and processes are consistent across the business.

What Policies And Processes Should SMEs Put In Place?

Policies don’t stop wrongdoing on their own - but they do two important things:

• they set clear expectations for your team and suppliers, and
• they show you’ve taken active steps if you’re ever challenged by a client, regulator, or investor.

Modern Slavery Policy (Even A Short One)

A simple modern slavery policy for an SME often covers:

• a statement of zero tolerance to modern slavery and human trafficking
• scope (your business + suppliers + subcontractors)
• responsibilities (who manages supplier onboarding and escalation)
• due diligence steps you take
• reporting process (how staff can raise concerns)
• consequences (termination rights, reporting to authorities where appropriate)

This policy should connect with your broader internal governance too - for example, it can sit alongside a Whistleblower Policy so staff have a safe route to report concerns.

Supplier Onboarding Checklist

Create a repeatable onboarding checklist so you’re not reinventing the wheel each time. Your checklist might include:

• supplier details and contract owner
• risk rating (low/medium/high) based on geography, sector and labour model
• documents requested (policy, certifications, workforce info)
• contract clauses included (warranties, audit rights, termination for breach)
• review frequency (e.g. annual for higher-risk suppliers)

Training: Keep It Light But Real

SMEs don’t always need a formal training programme, but you should make sure the right people know what to look for. Consider short training for:

• procurement / operations
• HR / hiring managers
• anyone managing contractors or agencies

Focus on practical red flags (for example: workers appearing controlled, unusual payment arrangements, recruitment fees, withheld documents, intimidation, or unsafe accommodation deductions).

And if you’re hiring staff directly, clear documentation in your Employment Contract and workplace policies helps you set lawful expectations, reporting lines, and disciplinary processes if issues arise.

How Do You Write A Modern Slavery Statement (And When Do You Need One)?

If you do meet the £36m turnover threshold, publishing a modern slavery statement becomes a legal requirement.

Even if you don’t meet the threshold, some SMEs choose to publish a voluntary statement because it helps with sales, tenders, and trust.

What Should A Modern Slavery Statement Include?

A modern slavery statement usually explains the steps your business has taken during the financial year to ensure that modern slavery is not taking place in:

• your business, and
• your supply chains.

Common topics to cover include:

• Your structure and business (what you do, where you operate)
• Your policies (modern slavery policy, whistleblowing, supplier code)
• Due diligence processes (supplier onboarding and checks)
• Risk areas and how you manage them
• Training provided to staff
• Effectiveness measures (what you monitor, KPIs if appropriate)

Approval, Signature And Timing Requirements

Where section 54 applies, the statement must be approved by the organisation’s board (or equivalent management body). It must also be signed by a director (for a company) or an equivalent senior person (for example, a designated member/partner).

The statement should be published for each financial year, typically within six months of the organisation’s year-end.

Where Should It Be Published?

Where the section 54 duty applies, the statement is typically published on your website with a prominent link from your homepage. If you don’t have a website, you should be prepared to provide it on request.

Don’t Overpromise

A common mistake is treating the statement like marketing copy. This can backfire if you claim you do things that you don’t actually do.

It’s better to be honest and proportionate, for example:

• what you’ve implemented so far
• what you’re still building
• what your priorities are for the next year

If you’re ever challenged, being able to show records (onboarding notes, supplier confirmations, contract clauses, training attendance) matters just as much as the statement itself.

What Contracts And Clauses Help Small Businesses Manage Modern Slavery Risk?

This is where many SMEs can make the biggest impact quickly: put expectations into your contracts, and make sure you have practical rights if a supplier or subcontractor fails to meet them.

Key Contract Protections To Consider

Depending on your industry and leverage, you might include clauses dealing with:

• Compliance warranties (they comply with modern slavery laws and don’t engage in forced labour)
• Flow-down obligations (they must impose similar requirements on their subcontractors)
• Audit / information rights (you can ask for evidence or inspect processes where reasonable)
• Notification obligations (they must tell you if they become aware of a breach or investigation)
• Termination rights for breach
• Indemnities (in some cases) for losses caused by their breach

For businesses selling into larger organisations, it’s also common to be asked to sign customer terms that impose these obligations on you. Make sure you can actually comply with what you’re agreeing to - and if in doubt, having a lawyer review or negotiate the contract can prevent you from signing up to unrealistic obligations.

If you’re sharing personal data with suppliers (for example, customer delivery information, worker records, or contact details), you may also need a Data Processing Agreement so your privacy and security requirements are contractually enforceable alongside modern slavery controls.

Align Modern Slavery Compliance With Your Wider Business Policies

Modern slavery risk often overlaps with other areas of compliance and governance. For example:

• How your team engages vendors and uses systems can be set out in an Acceptable Use Policy.
• Conflicts in procurement (for example, staff receiving gifts from suppliers) can be managed through a conflict of interest policy.

The more your policies join up, the easier it is to run compliance without slowing the business down.

Key Takeaways

• The Modern Slavery Act 2015 can still matter to an SME or startup even if you don’t meet the £36m turnover threshold, because customers, investors and contracts often expect modern slavery controls.
• If your business meets the turnover threshold (including relevant group turnover), you may have a legal duty to publish an annual modern slavery statement and keep it updated.
• A proportionate SME approach usually starts with basic supply chain mapping, identifying higher-risk suppliers, and applying extra checks where risk is higher.
• Simple, practical policies, onboarding checklists, and staff training can go a long way - and they’re easier to build now than when you’re scaling fast.
• Well-drafted supplier and subcontractor contracts help you enforce modern slavery expectations through warranties, flow-down clauses, audit rights, and termination rights.
• Don’t overpromise in a statement or policy - it’s better to be accurate and keep evidence of what you’ve actually done.

If you’d like help putting a modern slavery compliance approach in place (or reviewing your contracts and supplier terms), you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.