Apple, Foxconn admit to over-reliance on temp workers in China

Apple, Foxconn admit to over-reliance on temp workers in China

A report from USA -based labor rights advocacy group China Labor Watch (CLW) on Sunday accused Hon Hai, also known as Foxconn in the global market, of violating the Chinese labor law by hiring too many temporary workers in its Zhengzhou plant to make iPhones. Peter Elstrom reports on "Bloomberg Markets: China Open".

Foxconn separately confirmed over-reliance on temporary workers, known internally dispatch workers, Reuters said. The Chinese labor law grants only 10% of dispatch workers to total up the workforce.

The report also lists a slew of other alleged workers' rights violations, including forced overtime. We have confirmed all workers are being compensated appropriately, including any overtime wages and bonuses, all overtime work was voluntary and there was no evidence of forced labor.

Apple confirmed it will launch its iPhone 11 model on September 10 for a start price of around $1,2000, according to The Inquirer. Apple said it's working closely with Foxconn to resolve the matter, but any sudden changes to the work schedule could affect this year's iPhones launch.

Why it's important: This is not the first time Foxconn, China's largest private sector employer, has broken Chinese labor laws.

It claimed that 50% of the staff in the factory were temporary, some of them students, and were not receiving promised bonuses.

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The Chinese Labor Watch group further states that Foxconn is forcing workers to do overtime. "Apple has the responsibility and capacity to make fundamental improvements to the working conditions along its supply chain, however, Apple is now transferring costs from the trade war through their suppliers to workers and profiting from the exploitation of Chinese workers".

The 51-web site doc detailed results from a number of workforce who had been reported to have labored at Foxconn's manufacturing unit in Zhengzhou, a town in China's central Henan province.

Apple pushed back strongly against the majority of the claims on Monday, saying it had conducted its own investigation and found that "most of the allegations are false". To make sure our high standards are being adhered to, we have robust management systems in place beginning with training on workplace rights, on-site worker interviews, anonymous grievance channels, and ongoing audits.

Apparently, the supply chain by Apple has been criticized for poor labor standards for several years and has induced the manufacturing partners to either improve the working conditions or risk losing business.

The CLW report claims workers at the Zhengzhou plant must get approval to not do overtime.

Foxconn often brings on temporary workers to help fill orders during the peak production season, but it may have a financial incentive to do so as well, the group suggests.