California Transparency in Supply Chains Act Disclosure

Rugs USA is committed to responsible business conduct and believes that every person has the right to safe, decent, and humane working conditions. Respect for human rights and environmental stewardship are fundamental principles of our business practices and standards. We expect all our suppliers, regardless of where they are located, to share those principles and uphold our standards.

We require all vendors, suppliers, third-party sellers, manufacturers, contractors, subcontractors, and their agents (collectively, “suppliers”) to abide by the standards set forth in our Vendor Code of Conduct and cascade those standards through their entire supply chain to ensure compliance.

Our Vendor Code of Conduct explicitly condemns forced labor and human trafficking and we will not knowingly work with suppliers who engage in these practices. Prison, indentured, bonded, and involuntary or slave labor obtained through human trafficking are forbidden. All workers must have the right to engage in work willingly, without surrendering identification and without the payment of fees. Workers have the right to freedom of movement and our suppliers must ensure it is afforded to them. Workers must have the right to terminate their employment without penalty upon providing reasonable notice. Suppliers are also required to procure their raw materials and/or components for products solely from sources that do not utilize forced labor or engage in human trafficking.

Although we do not currently maintain a formal verification, audit, or certification process with respect to our suppliers’ compliance with laws specifically related to human trafficking and slavery, the vast majority of our suppliers also supply products to larger companies who do have such processes and we will rely on those audits or third-party certifications when assessing compliance with our standards. In addition, we will quickly act on any reports alleging human trafficking and slavery in our supply chain, and we will take action against any supplier we find to have acted improperly in this regard.

We maintain and enforce internal accountability procedures for our employees to prevent human trafficking and slavery within our supply chain. Any failure to comply with our standards could lead to corrective action, up to and including termination.

Although not currently in place, we intend to work toward providing a training program for our supply chain management employees on mitigating risks of human trafficking and slavery within the supply chain.