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Apple says a supplier's factory in China violated labor rules

HONG KONG -- Apple has acknowledged that one of its supplier's factories in China violated some of its rules on working conditions, and says it's trying to correct those infractions.

The company was responding to a China Labor Watch report released Sunday, which alleged that a Foxconn plant had flouted local laws and internal Apple standards to produce the iPhone 11 through forced overtime, unpaid bonuses and illegally hiring too many temporary workers.

The 51-page document detailed findings from several employees who were said to have worked at Foxconn's factory in Zhengzhou, a city in China's central Henan province. The facility is the world's biggest manufacturing site for Apple smartphones, producing half of all iPhones sold worldwide, according to the group.

Apple (AAPL) 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."

"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," the company said in a statement.

Foxconn also told Diversity News it had conducted a review of its operations in Zhengzhou, which turned up "some workforce compliance issues" but did not find "any evidence of forced labor."

The China Labor Watch report stated that student workers had been pushed to work overtime, "completing internships at the factory that are unrelated to their degree."

Apple acknowledged that it did find a number of student interns working overnight at a supplier facility, which is not allowed. But "all work was voluntary and interns were properly compensated," it added. "This issue has been corrected."

Foxconn also responded Monday, saying that the facility "currently has no interns working overtime."

The latest report also claims that many employees in Zhengzhou face verbal abuse, and that the factory does not typically report work injuries.

The allegations come ahead of a major Apple event scheduled at its Cupertino, California, headquarters on Tuesday, where the company is widely expected to reveal new iPhones.

The US tech giant has long faced criticism for how workers in its supply chain are treated in China. In 2010, a spate of suicides at Chinese factories owned by Foxconn — a Taiwanese electronics maker and longtime Apple partner — thrust both companies into the spotlight.

Apple and Foxconn both confirmed Monday that the number of short-term workers hired at the factory was problematic. Chinese law stipulates that temp workers, who are known as "dispatch workers," must not exceed 10% of a company's workforce, but they now make up around 50% of those working onsite, according to China Labor Watch.

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. By recruiting these laborers, "the factory does not need to increase the wages for all regular workers," it said. "Hence, the cost of employing dispatch workers is lower than recruiting more regular workers."

Apple says it has learned that "the percentage of dispatch workers exceeded our standards," and is currently coordinating with Foxconn to fix the problem.

The report also pointed to an overwork problem at the factory.

"Chinese labor law mandates that workers must not work more than 36 overtime hours a month," China Labor Watch said.

"However, during the peak production seasons, workers at Zhengzhou Foxconn put in at least 100 overtime hours a month. There have been periods where workers have one rest day for every 13 days worked or even have only one rest day for a month."

Apple confirmed that it had found some employees "working for more consecutive days than our standards allow," and Foxconn said that "the number of hours of overtime work carried out by employees, which we have confirmed was always voluntary, was not consistent with company guidelines."

Both companies pledged this week to continue monitoring the situation, as Apple said "everyone in our supply chain should be treated with dignity and respect."

"Our work to address the issues identified in our Zhengzhou facility continues," Foxconn said.

"We will not hesitate to take any additional steps that might be required to meet the high standards we set for our operations."

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