Modern Slavery Reform: What the new bill means for business
On the 30th June 2026, the UK Government introduced proposed amendments to section 54 of the Modern Slavery Act 2015 (“MSA”) as part of the Immigration and Asylum Bill. If enacted, the reforms will significantly strengthen the UK’s modern slavery reporting regime, and address some of the most persistent criticisms of the existing framework.
The limitations of section 54
Section 54 currently requires commercial organisations carrying on business in the UK with annual turnover exceeding £36 million to publish an annual slavery and human trafficking statement. This must explain the steps they have taken to identify and address modern slavery risks within their business and supply chains.
However, critics have often criticised the regime for prioritising transparency over accountability. Organisations do not need to undertake any particular due diligence activity and may comply by simply stating that they have taken no steps at all.
In practice, many statements have become standardised public disclosures which change little from year to year and provide limited insight into how businesses are identifying and managing human rights risks. The absence of financial penalties or meaningful enforcement mechanisms has also raised concerns that reputational considerations, rather than legal obligation, largely drive compliance.
A new direction for modern slavery reporting
The proposed amendments represent a clear shift in approach. Rather than relying on broad, voluntary reporting principles, the Government is seeking to introduce more prescriptive disclosure requirements backed by financial penalties for non-compliance.
Mandatory reporting requirements
One of the most significant proposed changes is the move from optional reporting topics to mandatory disclosure requirements.
Under the current regime, organisations may choose whether to report on matters such as risk assessment, due diligence procedures, training and performance measures. The Bill would instead require organisations to report against specified categories, including:
- risk assessments undertaken across operations and supply chains;
- policies designed to address modern slavery risks;
- due diligence processes;
- staff training and awareness measures; and
- methods used to assess effectiveness.
This reflects a broader trend seen internationally towards greater scrutiny of supply chain governance and human rights due diligence.
The reforms would also operate on a “comply or explain” basis: if an organisation has not taken action in a particular area, it must explain why. This represents a notable departure from the current position, under which companies can provide minimal information without justification.
For many organisations, compliance will require significantly greater engagement with supply chain data, internal governance processes and risk assessment procedures. It is also likely to increase comparability between organisations, enabling investors, customers, NGOs and other stakeholders to assess and benchmark corporate performance more easily.
Introducing real consequences for non-compliance
The most transformative aspect of the Bill may be the introduction of a financial penalties regime.
One of the principal criticisms of section 54 since its introduction has been that there are few practical consequences for failing to comply. While the Government can seek injunctive relief, it has rarely regarded these powers as a credible enforcement mechanism.
The Bill changes this position by introducing financial penalties for organisations that fail to comply without reasonable excuse. The proposed maximum fine would be the greater of:
- £1 million; or
- 1% of an organisation’s turnover (or budget, in the case of public authorities).
For large multinational organisations, the turnover-based calculation could result in penalties significantly exceeding £1 million.
The Government has also proposed a more explicit “name and shame” approach, reflecting a desire to combine financial sanctions with reputational pressure.
Together, these measures mark a substantial evolution in the enforcement of modern slavery reporting obligations.
Practical implications for businesses
Businesses should start preparing now by:
- Reviewing existing modern slavery statements against the proposed mandatory reporting requirements.
- Strengthening supply chain due diligence and risk assessment processes.
- Improving visibility of higher-risk suppliers and supply chains.
- Ensuring boards and senior management have adequate oversight of modern slavery compliance.
- Reviewing staff training and internal reporting procedures.
- Preparing for increased scrutiny from regulators, investors, customers and NGOs.
Contact us
Our Commercial Team can assist with reviewing modern slavery compliance frameworks, advising on supply chain due diligence, updating supplier contracts and preparing modern slavery statements in line with evolving legal requirements.