Reporting for this story
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Reporting for this story
HOW WE REPORTED THE STORY
WHO WE TALKED TO
- 15 current and former workers at iPhone manufacturing facilities owned by Foxconn. Apple pays Foxconn to manufacture the iPhone.
- Foxconn suppliers, customers, competitors, consultants, and company stock analysts.
- Foxconn declined our request for a factory visit. The company responded to our questions in writing.
- Apple declined to comment
WHO FOXCONN IS
- Foxconn is the trade name for Taiwan-based Hon Hai Precision Industry Co.
- The company ranks 109 in Fortune Magazine’s Global 500.
- Last year’s revenues: $61.8 billion, more than Microsoft or Boeing or Pfizer.
- Largest exporter in China.
WHAT IPHONE WORKERS TOLD US
COMPENSATION:
Workers: Base pay is 920 RMB/month (US $135), the required minimum wage. Foxconn provides housing subsidies, on-campus dormitories, ATM machines, karaoke facilities, and free cafeteria food.
Foxconn: Foxconn comply with China Labor Law on every aspect of our HR policy, including wages and compensation policy. We define and maintain our wage, benefits and compensation package on very competitive position in labor market. Base wage increases when law/regulations change, seniority increases, and labor market changes. Overtime is paid according to China Labor Law without exception. Allowances are provided as required and defined.
OVERTIME PAY:
Assembly line worker Liu: Foxconn finds creative ways to avoid paying. “For example, if today is a national holiday and you work today, company won’t pay you triple as required by labor law. Instead, it will transfer those hours on your time card to non-holidays when you take time off or are forced to take time off. So the company lets you rest, but it also avoids paying double or triple.”
Industrial design department engineer Li Mingqi: “They stop paying overtime if you exceed 80 hours a week. No matter how much you work, they won’t approve the extra pay.”
Foxconn: Not true; overtime is paid according to China Labor Law without exception. When employees work on national holidays, employees receive triple pay according to China Labor Law. Foxconn defines and manages
working hours conforming to labor law. The two examples illustrated above are not the case that we are aware of in our practice.
Apple: Found overtime pay issues at supplier widely reported to be Foxconn.
In Final Assembly Supplier Audit Report (2007):
“We discovered an issue with the calculation of overtime pay at one supplier. The overtime pay structure used by this supplier was complex and resulted in less overtime premium than required under applicable regulations. This supplier has changed their policies and procedures to ensure that employees are paid the appropriate premium for every hour of overtime worked.”
Apple: Found overtime underpayment at 45 of 83 contract suppliers in Supplier Responsibility 2009 Progress Report:
“We also found instances of pay calculations that resulted in underpayment of overtime wages at 45 facilities. We required these suppliers to adjust their pay practices to ensure that the legally applicable minimum and overtime wages are paid to all employees, and that pay practices are clear and easily understood.
PENALTIES FOR WASTING FOOD
Assembly line worker Wang: “Foxconn has a policy forbidding you to waste any food. But but the dishes are so bad that sometimes we spend several kuai and eat out. Waste it once, and get a warning. Do it twice, and they fine you.”
Foxconn: Not true; Foxconn provides meal allowance to employees in addition
to base wage that both are independently calculated. Foxconn employees are free to take meal at preferred food services with varieties of choice in campus; who can just present employee badges on card reader to receive meal services at canteen or food court.
WORKPLACE INJURIES
Assembly line worker Liu: Foxconn punishes workers for reporting injuries: “A lot of workers dare not report their work injury, but pay for the medical treatment and bear the pain working because Foxconn will hold responsibilities of staffs of three levels up from the injured person. This makes both injured workers and junior level supervisors afraid of receiving punishment for reporting injury. After all, they all have families to raise.”
Assembly line worker Wang: “Who wants to report injury? Who dares? If you do, you get punishment! Recently, an injury occurred around me. A worker was hurt and privately discussed the injury and got a little amount of money from staff division. No one beyond our workshop knows this. I see this worker everyday sitting in a chair and doing very minor things. The worker injured in hand, so he can’t make any products.
Foxconn: Not true; Foxconn strongly encourages workers and managers to
report workplace injuries and to highlight the potential threats to the safety of workers as well as workplaces. Our policy is to enforce real time and truthful reporting of occupational injuries for the well-being of employees; failing to report or late reporting is a violation to company policy and regulations as well as a breach of China Law.
Apple: From Supplier Responsibility 2009 Progress Report:
Of 83 supplier facilities audited: 79 percent were found “in compliance” with Occupational Injury Prevention rules; 9 percent had “limited violations;” 12 percent were found with “frequent violations.”
LINKS:
Foxconn 2008 Corporate Social & Environmental Responsibility Report.
Apple Supplier Responsibility 2009 Progress Report.
Apple Final Assembly Supplier Audit Report February 2007.
Summary: “In the summer of 2006, we were concerned by reports in the press alleging poor working and living conditions at one of our iPod final assembly suppliers in China. In response, we conducted a thorough audit of the facility and worked closely with the supplier to correct any practices or incidents that did not conform to our Supplier Code of Conduct.”
China Labor Watch on Recent Suicide of Foxconn worker.
— Scott Tong, China bureau chief
— Cecilia Chen, bureau researcher
FOXCONN STATEMENT IN RESPONSE TO OUR QUESTIONS:
Hello Scott,
From the facts we have indicated in “About Foxconn in CSER”, you will
further understand what the determination Foxconn is committed to the
corporate social and environment responsibility. However, based on the
questions you have raised, it’s very hard to prevent us not to suspect your
purpose for this reporting! We’d like to know to what extent that you have
done with the investigation regarding the facts behind the scenes? Or, you
think its O.K. to reflect the whole picture by just few interviews? We are
extremely keen to fulfill and achieve the requirement from the regulations
and continuously improvement, and really don’t know why you want to address
such specific topic? Abovementioned are very reasonable doubt on your bias
interpretation, you owe us an explanation!
BR/
Arthur Huang
Public Relations
Foxconn Technology Group
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