Call Center Localization Act

Summary#

This bill would stop certain U.S. employers from moving call center jobs or contracting those jobs abroad, and require businesses to tell customers where a customer-service agent is located and whether a machine (AI) is handling the call. Its main tools are a public list of employers that move or contract call center work overseas, limits on federal grants and guaranteed loans for those employers, rules for federal contracts, and new disclosure and transfer rules for customer service communications. The stated policy goal is to keep call center jobs in the United States and increase transparency for consumers.

• Public list and notice: Employers must notify the Secretary of Labor at least 120 days before relocating a call center or contracting call center work overseas. The Secretary will publish a public list of employers that do so. Employers stay on the list for up to 5 years unless they return work to the U.S. or otherwise meet removal rules.
• Penalties for failing to notify: Failing to give the 120-day notice carries a civil penalty of up to $10,000 per day.
• Limits on federal funding: Employers on the list are ineligible for direct or indirect federal grants or federal guaranteed loans for 5 years. Employers that already have federal grants or loans and then get listed face monthly financial penalties and possible cancellation of the award.
• Federal contracting: Agencies must prefer U.S. employers not on the list when awarding civilian or defense-related contracts, and must require that any call center work under federal contracts be performed inside the United States.
• Customer service disclosures and transfers: Businesses must have customer-service agents say their physical location at the start of each call or message, disclose when AI is used, and immediately transfer a consumer to a human agent physically located in the U.S. if the consumer requests it. The FTC will enforce these rules.
• Report and timing: The Secretary of Labor must report to Congress within 1 year on locations of federal call center work and AI-related job losses. Several provisions take effect one year after enactment.

What it means for you#

• Call-center employers (covered size):

  • Must give 120 days’ notice before relocating or contracting call center work overseas.
  • Will be publicly listed for up to 5 years after relocation or contracting, unless they restore U.S. jobs or amend contracts to require U.S.-based workers.
  • If listed, cannot apply for or receive federal grants or guaranteed loans for 5 years (with narrow waiver rules). Existing federal awards can be reduced by monthly penalties and canceled.
  • Could face fines up to $10,000 per day for failing to give required notice.

• Businesses that provide customer service (all sizes that participate in such communications):

  • Must start each customer-service call or communication by having each employee or agent state their physical location.
  • Must disclose at the start if AI (a nonhuman system) is being used and tell consumers they can ask to be transferred to a U.S.-based human agent.
  • Must immediately transfer a consumer to a human agent physically located in the United States if requested.
  • Must certify annually to the Federal Trade Commission (FTC) whether they complied.

• Consumers:

  • Can hear where the agent is physically located at the start of a call or message.
  • Can request and expect an immediate transfer to a U.S.-based human agent when the business is subject to these rules.
  • May be informed at the start when an AI system is interacting with them.

• Federal contractors and agencies:

  • Agencies must prefer employers not on the relocation/contracting list when awarding contracts.
  • Contracts must require any call center work under the contract (or subcontracts) to be done inside the United States.
  • Secretary of Labor must report to Congress on federal call-center locations and AI impacts within 1 year.

• Workers:

  • The bill states it does not allow withholding or denial of federal payments or benefits (like unemployment, disability, or retraining funds) to workers whose employers relocate.

Expenses#

No direct public cost estimate is identified in the available material.

• The bill creates penalty receipts and program impacts: failure-to-notify fines (private penalties up to $10,000 per day) and monthly penalties on existing grant or loan recipients equal to 8.3% of total disbursed amounts while on the list. Agencies may use penalty amounts for their grant or loan programs, but not to fund payments back to the same employer.
• Businesses will likely face compliance costs to implement location disclosures, AI disclosures, transfer systems to U.S.-based agents, and annual FTC certification.
• Federal agencies and the FTC will incur administrative costs to maintain the public list, process notices, run preference and contract compliance, prepare the required Labor Department report, write and implement FTC regulations, and enforce the new disclosure rules. The bill does not provide a dollar estimate.
• Employers placed on the list may lose access to federal grants or guaranteed loans for 5 years, which is a potential financial loss for those firms.
• No explicit budget or fiscal note is included in the text provided.

Proponents' View#

The bill text itself suggests these possible reasons someone might support it:

• The bill appears intended to preserve U.S. call center jobs by discouraging companies from moving or contracting call center work abroad.
• Making a public list and restricting federal grants or loans could create a financial incentive for employers to keep call center work in the United States.
• Requiring agencies to prefer U.S. employers and to require call center work under federal contracts to be performed inside the U.S. could keep government-supported jobs in the country.
• Mandatory disclosures and the right to be transferred to a U.S.-based human agent could improve transparency for consumers and let them choose a U.S.-based human if they prefer.
• The requirement for a Labor Department report on federal call center locations and AI-related job impacts could give Congress information for future policy decisions.

Opponents' View#

Based on the bill’s design and text, reasonable concerns include:

• One concern is that the bill does not give cost estimates for the new administrative work required of the Department of Labor, the FTC, or contracting agencies, making the budget impact unclear.
• The bill does not fully specify how to verify an agent’s “physical location,” how to measure the 30% “volume” threshold for contracting or relocation, or how to treat remote agents who split work across locations. This may complicate enforcement.
• Immediate-transfer requirements could be hard for some businesses to comply with if they do not already maintain U.S.-based agents on demand. That could increase business costs or delay customer service.
• The ineligibility and penalty rules could have large effects on employers that rely on federal grants or loans, but the bill does not explain how agencies should assess narrow waiver claims (national security, substantial U.S. job loss, or environmental harm).
• The public list and penalties may have broad economic effects on companies, but the bill does not include an analysis of potential impacts on competitiveness, procurement outcomes, or small businesses near the employer-size threshold.