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A couple of weeks ago, California-based company The Cupertino discovered that Pegatron had been violating student labor rules for quite a long. To conceal the violations, employees “went to extraordinary lengths” and falsified documents.
Apple Inc (NASDAQ: AAPL) has suspended business with Taiwanese electronics manufacturing company and iPhone assembler Pegatron. It turned out that the latter misclassified student workers. It also allowed some of them to work nights and overtime, which is a serious violation of Apple’s Supplier Code of Conduct.
Pegatron is one of the world’s top information technology companies that develops computing, communications, and consumer electronics for branded vendors. It also develops, designs, and manufactures computer peripherals and components. Its products include notebooks, desktop personal computers, motherboards, video graphics arrays, cable modems, tablet personal computers, set-top boxes, smartphones, game consoles, automotive electronics, and smart home devices. In addition, Pegatron has been Apple’s partner that assembled the giant’s products including the new iPhone 12.
A couple of weeks ago, California-based company The Cupertino discovered that Pegatron had been violating student labor rules for quite a long. To conceal the violations, employees “went to extraordinary lengths” and falsified documents. Upon the discovery of these activities, Apple placed Pegatron on probation until the completion of corrective action.
“We have a rigorous review and approval process for any student worker program, which ensures the intern’s work is related to their major and prohibits overtime or night shifts. Pegatron misclassified the student workers in their program and falsified paperwork to disguise violations of our Code, including allowing students to work nights and/or overtime and in some cases to perform work unrelated to their major.”
Meanwhile, Pegatron believes its current iPhone business will not suffer.
GF Securities analyst Jeff Pu commented:
“Pegatron’s current iPhone business should not be affected. However, it is likely that Pegatron will lose some orders for Apple’s new handsets next year to Luxshare, which is poised to become a new iPhone assembler in 2021.”
Apple and Pegatron: iPhone Assembler’s Employee Mistreatment in 2014
Pegatron has already been involved in labor violation activities. In December 2014, Pegatron factories making Apple products near Shanghai had poor working conditions and mistreated employees. The investigation found out that the staff had to work eighteen days straight without a day off. During 12-hour shifts (sometimes 16 hours), workers even fell asleep on the production line. Besides, in dormitories, 12 workers shared a cramped room.
In August 2016, China Labor Watch published a report which stated that working conditions have not improved since 2014. The average worker at Pegatron’s Shanghai factory racks up 80 hours of overtime a month. In March of that year, over 62% of workers worked more than 100 overtime hours. 64% of its maintenance department interns overworked. At the same time, over 96% of Pegatron workers were only making minimum wage, well below Shanghai’s average income despite the extra overtime hours.