Collegiate Licensee Program Requirements

Category B

A licensee that participates in Category B submits to the FLA's monitoring process only those facilities that produce or manufacture products under license from FLA-affiliated schools.


For those facilities, Category B licensees take on the same obligations as Participating Companies. This means they must adopt the FLA workplace code for those facilities and conduct internal company monitoring and monitoring by accredited independent external monitors, in compliance with the FLA's monitoring principles and its monitoring guidance and benchmarks.

It also means that a public report will be issued each year on the company's implementation of the FLA standards and the remedial steps it has taken at its applicable facilities. These facilities also are subject to the FLA's third party complaint procedure.

Annual dues for Category B licensees are based on the company's total revenues from goods licensed by all FLA-affiliated schools. If these revenues are $100 million or less, a Category B licensee's dues are $5,000. If these revenues are more than $100 million, dues are $5,000 plus .00001 times revenues in excess of $100 million.

The Monitoring Process
Each company begins the monitoring process by submitting a plan and electing an initial implementation period of two or three years. The plan must describe the company's internal and independent external monitoring programs. The Charter provides further information about the designation of applicable brands and the criteria for designating "de minimis" facilities.

After acceptance of its plan, the company must provide a complete list of its applicable facilities.

Internal Monitoring: Companies are required to apply their monitoring plan to half of their facilities during the first year and all of their facilities during the second and all subsequent years of FLA participation, in accordance with FLA monitoring principles and guidelines. A key aspect of this implementation process is a company's regular internal monitoring of an appropriate sample of their production facilities. The effectiveness and efficiency of the implementation of the monitoring plan will be evaluated by the process of external monitoring and by FLA staff members who will annually visit and audit the company's compliance programs.

External Monitoring: The FLA will select a random sample of five percent of a company's applicable facilities to be subject to Independent External Monitoring (IEM). The entire sample will be determined from the company's submitted factory list, and the random sampling methodology will be weighted for risk factors that include country risk, production process, factory size/number of employees, and past compliance performance. For Category B Licensees with only one facility, to avoid auditing the same facility each year, there will be a transition to a three-year cycle that includes an IEM audit and then company internal auditing and verification in the following two years.

Costs of External Monitoring
In order to pay for its IEM visits, a company makes a contribution to a revolving trust that is based on the IEM sample size. The company contribution is based on the following formula: Average cost of audit ($4000) x number of applicable facilities. The company pays the assessment before the monitoring visit, and if the total cost of a company's IEM visits is less than the company's total contribution to the trust, then the company can be reimbursed the balance at the end of the implementation year or roll over the reimbursable funds to the next implementation year. A non-refundable management fee of $2,110 will also apply per monitoring visit.

Reporting
Each year the company submits a report to the FLA describing its activities to implement the workplace code and monitoring principles and the corrective steps it has taken to address instances or patterns of noncompliance and prevent their recurrence in the future. The FLA uses this report and the monitoring reports of the accredited independent external monitors to prepare an annual public report on each company (see the Charter for more detailed information).

Additional Requirements
Category B Licensees are subject to the Special review procedure of company compliance with obligations. Please see the FLA Charter for more information on the Special Review process. Training on labor compliance is required for Category B Licensees whose affiliation is pending and for recently-affiliated Category B Licensees.