The FLA was established in 1999 and evolved out of a task force created by President Bill Clinton following a series of child labor and other sweatshop scandals involving major apparel and footwear brands.

The FLA posts the results of factory audits on its website, as well as the actions plans that FLA-affiliated companies develop with their suppliers to correct any issues that are found.

[8] The FLA also promotes a complaint channel for third parties in cases where there is a persistent or serious labor violation in a production facility used by any FLA-affiliated company, and where other grievance mechanisms or lack of procedures have failed workers.

[18][19] In 2019, the FLA was part of a group of global trade associations representing garment, footwear, and travel goods buyers who sent a joint letter to the Cambodian government, urging it to improve labor and human rights conditions.

[32][33] It also called for companies to identify the identification of alternate sourcing options opportunities, and said it would work with the government and other groups to find solutions to end human rights violations in the region.

Participating Companies and Participating Suppliers submit their entire supply chain to the FLA independent external monitoring process and commit to a range of obligations as affiliates of the FLA.[7] The human and labor rights violations in domestic and overseas supply chains that surfaced in the mid-1990s were brought to the forefront on university and college campuses by student activists and national human rights groups.

[38][39] In order to receive accreditation from the Fair Labor Association, participating companies must demonstrate substantial compliance with the Workplace Code of Conduct throughout their supply chain.

They must also undergo performance reviews, independent factory monitoring, verification of remediation initiatives, and a thorough evaluation of their internal protocols and auditing, as well as extensive training through the FLA.

As of 2020, the FLA Board had accredited the labor compliance programs of Patagonia, New Balance, Burton, Under Armour, Mountain Equipment Co-op, Knights Apparel, and others.

It leads the way precisely because its Secretariat is encouraged and even mandated to cast a critical eye on performance and to recommend practical innovations—to stay focused like a laser on the effectiveness and legitimacy of the effort as a whole.

"[42] Writing for MarketWatch in March 2017, Casey O'Connor and Sarah Labowitz of the NYU Stern Center for Business and Human Rights recognized the FLA's "sound model for developing and monitoring labor standards in the apparel industry" as an example for other organizations to follow in reporting on social responsibility indicators of interest to impact investors.

[43] The United Students Against Sweatshops, have stated that the FLA has "... a weak code that fails to provide for women's rights, a living wage, the full public disclosure of factory locations, or university control over the monitoring process.

[49] On February 16, 2012, after taking a guided tour of Foxconn, FLA CEO Auret van Heerden said, "The facilities are first-class; the physical conditions are way, way above average of the norm.

The New York Times noted that "Mr. van Heerden’s apparent praise of conditions at Foxconn came despite previous reports of employees committing suicide, dying in factory explosions and complaining of sometimes working more than 70 hours a week.

"[52] Heather White, the founder of monitoring group Verite, said about Van Heerden's remarks: “That he would make any comments prior to workers being interviewed off-site in a confidential environment is somewhat premature, to say the least.

"Attributing the suicides of sweatshop workers who make iPhones to mere boredom is insulting and the FLA's most creative argument to date for defending its corporate funders.