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Apple China Supplier Inspection Turns Up Pay, Overtime Violations

Apple said it has been working with the supplier to correct the problem.

Reuters / Yuya Shino

Overtime, wage and other violations were found at two facilities in China operated by one of Apple’s suppliers, Quanta, according to a new report from the Fair Labor Association.

The nonprofit organization, which brings together companies, universities and civil society groups to improve factory conditions, conducted inspections of plants in Shanghai and Changshu in August 2013, and interviewed hundreds of workers.

It found that both factories exceeded the legal work hour limits during periods of peak production, based on its review of 12 months of time records. Both plants were “inconsistent” in providing 24-hour rest breaks every seven days. At the plant in Changshu, more than half of the total workforce — 62 percent — worked seven days straight, without a day off, at least once in the fourth quarter of 2012.

The longest consecutive work period stretched to 16 days, without a break.

Apple’s Chinese suppliers have been a focus of scrutiny since 2012, when the New York Times examined the working conditions that produced some of the world’s most coveted gadgets.

Under Chief Executive Tim Cook, Apple became the first (and only) technology company admitted to the Fair Labor Association, and has pledged to provide safe and fair working conditions. Apple said it has taken steps over the last year to work with the supplier to correct the problems identified in the report.

The Fair Labor Association found pay irregularities, noting that entry-level production workers are entitled to 80 percent of their wages when they’re sick. An inspection of pay records revealed that workers employed for less than two years received just 60 percent of their pay for sick leave.

The group also uncovered time clock irregularities, which it said raised the risk that workers were not compensated for production work during these times.

Apple said that through July, Quanta has averaged 86 percent compliance with its 60-hour workweek.

“Excessive overtime is not in anyone’s best interest, and we will continue to work closely with Quanta and our other suppliers to prevent it,” Apple said in a statement.

Although the factories had established workplace health and safety policies, neither had completely implemented these measures, according to the report.

In Shanghai, half of the material safety data sheets that identify the chemicals used in the factory were incomplete or contained “unreliable”information. In Changshu, that was the case in 80 percent of the data sheets. Neither factory met local requirements for indoor air quality testing, the report noted, and, in each case, the emergency shower and eyewash stations were not easily accessible.

About a third of the workers in Shanghai said they were subjected to abusive behavior — such as shouting and verbal attacks — when they made minor mistakes. Supervisors blamed the stress related to meeting production goals.

In interviews, factory workers complained about their wages and the lack of disposable income– a complaint that the organization notes is common among employees of the Chinese electronics industry.

“Although assessors found both factories paying at least the legally mandated minimum wage, workers in both factories reported that their wages are insufficient to cover their basic needs and provide a discretionary income,” the report notes.

The Cupertino technology giant said it has conducted 451 comprehensive audits of its supply chain to uncover problems and work with suppliers to fix them. It has inspected the Quanta facilities 16 times — most recently last month, to push for improvements.

“Apple conducted four follow-up inspections on top of the annual audits of both facilities, to ensure the needed corrections are in place,” Apple said in a statement.

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