Apple and Foxconn confirmed they broke a Chinese labor law by hiring too many temporary workers at the world’s biggest iPhone factory

On the eve of Apple announcing the iPhone 11, a report from China Labor Watch has accused the company — along with its manufacturing partner Foxconn — of profiting from worker exploitation to build the new phone.

Investigators from China Labor Watch went undercover at Foxconn's Zhengzhou factory, the largest iPhone factory in the world which is sometimes referred to as "iPhone City."

One of the investigators worked in the factory for four years, the report said.

Read more: Inside 'iPhone City,' the massive Chinese factory town where half of the world's iPhones are produced

China Labor Watch's report said that in August 2019, 50% of the workforce was made up of temporary or "dispatch" workers. According to Chinese law, dispatch workers can only make up a maximum of 10% of any company's workforce.

Spokespeople for both Apple and Foxconn confirmed in statements to Bloomberg, the Washington Post, and CNBC that the proportion of dispatch workers had exceeded the limit allowed by Chinese law.

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Apple told Bloomberg it had found the "percentage of dispatch workers exceeded our standards."

"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," Lori Lodes, an Apple spokeswoman told the Washington Post.

"We did determine that the affected workers were paid all earned overtime and related bonus payments," a Foxconn spokesperson told CNBC.

"We are working closely with Foxconn to resolve this," said Apple in its statement to CNBC.

Read more: Chinese workers who assemble the iPhone are literally lining up to quit a major Apple supplier thanks to falling sales

Apple CEO Tim Cook.

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According to China Labor Watch, the number of dispatch workers has increased dramatically since 2016. The report said Apple and Foxconn increased those numbers as a means of offsetting the cost of the US-China trade war.

"Apple is now transferring costs from the trade war through their suppliers to workers and profiting from the exploitation of Chinese workers," the China Labor Watch report said.

China Labor Watch claimed the companies committed a slew of additional workers rights violations in the factory, all of which both Apple and Foxconn denied in their statements to Bloomberg, the Washington Post, and CNBC.

Those allegations included:

  • Workers putting in 100 hours of overtime per month, well in excess of China's legal limit of 36 hours per month.
  • Student workers being forced to work overtime during peak season.
  • The factory didn't provide the workers with adequate protective equipment, even though workers said they were exposed to toxic chemicals every day.
  • The factory didn't report work injuries.

Apple and Foxconn were not immediately available for comment when contacted by Business Insider.

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