This bill directs the Secretary of Labor to publish and maintain a public list of employers that relocate call-center operations or contract call-center work to locations outside the United States, and to make listed employers ineligible for federal grants and guaranteed loans. It also requires businesses engaging in customer service communications to disclose the physical location of agents and to notify consumers when artificial intelligence is handling interactions, and it directs agencies to require that call-center work performed under federal contracts occur inside the United States.
The measure combines procurement and financial leverage with disclosure requirements to deter offshoring of customer-service jobs. For compliance officers, procurement teams, and customer-service operators, the bill creates new notification duties, monetary penalties, contract conditions, and FTC-enforced consumer-facing obligations that will reshape vendor selection, subcontracting, and how companies present automated or offshore support to U.S. consumers.
At a Glance
What It Does
Requires employers to notify Labor before moving or contracting call-center work overseas, puts transgressors on a publicly available list, and makes listed firms ineligible for many federal grants or guaranteed loans; it also forces disclosure of agent location and AI use in customer-service contacts and limits federal contract call-center work to U.S. locations.
Who It Affects
Call-center operators and their contractors, businesses that rely on outsourced customer service (including federal contractors), federal grant and loan programs, and consumer-facing customer-service operations that use AI or foreign-based agents.
Why It Matters
The bill combines financial disqualification and procurement preference to change offshoring incentives while creating new consumer-facing transparency obligations enforced by the FTC—altering both back-office contracting and front-line customer interactions.
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What This Bill Actually Does
The bill creates a statutory framework to discourage offshoring of call-center work by tying eligibility for federal financial assistance and procurement preference to whether a company relocates or contracts call-center operations abroad. Employers must provide advance notice to the Secretary of Labor before moving or contracting covered call-center work; failure to notify triggers daily civil penalties.
The Secretary must maintain a public list of firms that relocate or contract call-center work overseas and keep firms on that list for a limited period unless they restore U.S.-based operations or amend contracts to require U.S.-based performance.
Companies that appear on the Labor Department list face a multi-part financial consequence: a five-year bar on applying for or receiving federal grants and guaranteed loans, with narrow exceptions and a limited pathway to regain eligibility if the firm certifies it will reestablish U.S. operations quickly. Firms that receive federal funding and later appear on the list are subject to ongoing monthly penalties tied to their award plus possible cancellation of the award if they remain noncompliant.
When federal agencies award civilian or defense contracts, contracting officers must favor — and may require as a condition of award — firms that keep call-center work in the United States; the bill separately requires that call-center work under federal contracts be performed within the United States.On the consumer-facing side, the bill obligates business entities that initiate or receive customer-service communications to ensure that any participating employee or agent discloses their physical location at the start of the interaction and to disclose when a nonhuman, machine-based system is being used. If an agent is located outside the United States, consumers must be told they can request immediate transfer to a U.S.-based human agent; businesses must honor such transfer requests.
Covered businesses must provide an annual certification to the Federal Trade Commission attesting to compliance, and the FTC will adopt regulations and enforce violations under its unfair or deceptive practices authority.The bill also requires the Department of Labor to report to Congress on the extent of federal call-center work, differentiating work done by federal employees versus contractors, accounting for geographic locations, and assessing job impacts from the deployment of artificial intelligence in customer service. One-year and two-year regulatory and effective-date lags are built into the statute to give agencies time to write implementing rules and for businesses to adapt.
The Five Things You Need to Know
Employers must notify the Secretary of Labor at least 120 days before relocating a call center or contracting call-center work overseas, with a civil penalty of up to $10,000 per day for failures to provide notice.
The Secretary of Labor must publish a public list of employers that relocate or contract call-center work overseas; firms remain listed for up to five years unless they demonstrably reestablish equivalent U.S. operations or amend contracts to require U.S.-based performance.
Listed employers are ineligible to apply for or receive any direct or indirect federal grants or federal guaranteed loans for five years, subject to narrow waivers for national security, substantial U.S. job loss, or environmental harm; firms with existing awards face monthly financial penalties and potential award cancellation.
Federal contracts must give preference to, and may require as a condition of award, U.S. employers that keep call-center work in the United States, and the bill separately requires that any call-center work performed under federal contracts be done inside the United States.
Businesses must disclose, at the start of each customer-service communication, the agent’s physical location and whether AI/nonhuman systems are in use, honor consumer requests to transfer to a U.S.-based human agent immediately, and annually certify compliance to the FTC; the FTC enforces violations under its unfair or deceptive acts authority.
Section-by-Section Breakdown
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Operational definitions that determine coverage
This section sets the operative terms the rest of the law depends on: what counts as a call center, who qualifies as an employer, what it means to relocate or contract work overseas, and the definitions of ‘‘telecommunication’’ and ‘‘artificial intelligence.’nPractically, coverage turns on quantitative thresholds—employers are captured only if they run call centers with 50 or more employees (or the equivalent 1,500 aggregate hours per week) and relocation/contracting is defined by a 30 percent-volume threshold measured against the prior 12‑month average. Those numerical cutoffs will decide which facilities and transactions trigger notice, listing, and ineligibility.
Notice, public listing, and grant/loan bar with penalties
Employers must give at least 120 days’ advance notice before relocating or contracting covered call-center work overseas; the bill attaches a civil penalty (up to $10,000 per day) for failures to notify. The Secretary of Labor must maintain a public list of transgressors and keep employers on that list for up to five years unless they reestablish equivalent U.S. operations or amend contracts to require U.S.-based performance.
Appearing on the list triggers a five-year ineligibility for federal grants and guaranteed loans for new awards, and for recipients already holding awards the statute imposes monthly penalties tied to past disbursements and allows agencies to cancel awards if violations persist. The Secretary and awarding agencies have limited waiver authority for national security, major U.S. job loss, or environmental harm.
Worker protections, reporting, and procurement conditions
The bill expressly preserves workers’ entitlement to federal benefits—unemployment, retraining, disability—so the financial penalties and ineligibility rules target employers, not displaced workers. The Department of Labor must produce a report within a year documenting federal call-center locations, contractor versus federal employee work, and any job losses linked to AI adoption.
Separately, agency heads must favor firms that do not appear on the Labor Department list when awarding civilian or defense contracts, and the statute requires that call-center work under federal contracts be performed inside the United States as a condition of award.
Agent location and AI disclosure obligations, transfer right
Businesses initiating or receiving customer-service communications must ensure participating agents disclose their physical location at the start of an interaction, and must disclose when AI or another nonhuman system is handling the interaction. If an agent is located outside the United States, the consumer must be informed they can request an immediate transfer to a U.S.-based human agent; businesses must comply with that request.
The statute provides several narrow exceptions (communications entirely handled by U.S.-based agents, consumer-initiated calls knowingly to foreign addresses, emergency services) and authorizes the FTC to exempt classes of entities or communications in exceptional circumstances.
Annual FTC certifications and FTC enforcement mechanics
Covered businesses must certify annually to the FTC whether they complied with the disclosure and transfer requirements. The FTC must promulgate implementing regulations within one year and enforce violations using its unfair or deceptive acts and practices authority; penalties and remedial powers align with those available under the FTC Act. This makes noncompliance both a reputational and an enforceable legal risk.
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Explore Employment in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- U.S.-based call-center employees — The bill ramps up legal and procurement incentives for firms to keep or bring customer-service jobs to the United States, potentially protecting or creating domestic employment in the sector.
- Domestic call-center operators that retain U.S. staff — Firms that provide onshore customer service could gain competitive advantage in federal contracting and avoid ineligibility for federal grants and loans.
- Consumers preferring U.S.-based or human interactions — The disclosure and transfer rules increase transparency and give consumers an immediate right to reach U.S.-based human agents when desired.
- Federal procurement officers and policymakers — The statute provides tools (preference and contract conditions) to align outsourced customer-service work with federal policy objectives on domestic job retention.
Who Bears the Cost
- Employers that offshore customer-service work — These firms face notification duties, potential daily penalties for noncompliance, multi-year bans from federal grant and loan programs, and clawbacks or monthly penalties if already funded.
- Companies relying on global vendor networks and subcontracting chains — The 30 percent-volume threshold and the requirement that federal contract call-center work be U.S.-based will force contract reworking, higher labor costs, or reshoring investments.
- Federal awarding agencies and procurement offices — Agencies will need to administer eligibility checks, apply preferences, manage waivers, and potentially re-procure services constrained by the in-country requirement, adding administrative burden.
- The Federal Trade Commission — The FTC must write implementing regulations, process annual certifications, investigate complaints, and enforce penalties, increasing its regulatory workload.
Key Issues
The Core Tension
The central dilemma is whether to prioritize preserving U.S. customer-service jobs by using procurement and financial leverage — which raises administrative complexity, higher service costs, and potential trade friction — or to accept global sourcing efficiencies that lower costs but shift employment and reduce transparency about who (or what) handles consumer interactions; the bill resolves this by favoring domestic jobs and consumer disclosure at the price of regulatory complexity and potential market distortion.
The bill relies on precise numeric thresholds and administrability assumptions that create multiple implementation wrinkles. Coverage turns on who qualifies as an ‘‘employer’’ (50 employees or 1,500 aggregate hours per week) and on whether a move or contract transfer meets the 30 percent-of-volume test measured against the prior 12-month average; computing those metrics across distributed, hybrid, or seasonally variable call-center operations will be operationally complex and litigation-prone.
The distinction between ‘‘contracting call-center work overseas’’ and permissible subcontracting arrangements could be gamed by multilayered supply chains or by relocating only discrete functions that nonetheless displace domestic workers.
The customer-facing disclosure regime raises definitional and technical questions. ‘‘Physical location’’ is simple for fixed-site agents but ambiguous for remote or cloud-based agents routed through virtual desktops or voice-over-IP providers; firms will need clear guidance on whether an outsourcer’s IP address, payroll jurisdiction, or physical seat determines location. The mandate to immediately transfer consumers to U.S.-based human agents creates potential latency and capacity problems for firms that rely on offshore staffing to handle volume surges; firms may respond by increasing onshore headcount, routing to automated menus, or restricting certain services, with cost implications.
Finally, the interplay with trade law and international contracting norms is unsettled: conditioning federal financial support on maintaining domestic call-center employment could attract WTO or bilateral challenges if treated as discriminatory or protectionist.
Enforcement also generates trade-offs. The statute places enforcement responsibilities on Labor (for the list) and the FTC (for disclosures), but verification requires cross-border fact-finding and audit capabilities that neither agency currently performs at scale for vendor global footprints.
Awarding agencies face discretion challenges in applying preferences and waivers for national security, environmental harm, or major job losses—decisions that could produce inconsistent outcomes across agencies and programs.
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