Foxconn vows to reduce hours at factories

Foxconn, the largest supplier of Apple Inc, said on Friday that it will remedy its workplace abuses after a US labor auditor commissioned by Apple inspected Foxconn's three plants in China.

A report, filed by the nonprofit Fair Labor Association and released on Thursday, found that Foxconn employees work 56 hours a week on average - which is more than the 40 regular hours a week and 36 hours of overtime a month that they are allowed under Chinese law.

In some cases, the report found that employees had worked more than seven days in a row without taking a 24-hour break, as they are required to. And many were not properly paid for working overtime, it said.

In February and March, the Fair Labor Association surveyed more than 35,000 workers in three Foxconn factories, two of which are in the coastal manufacturing hub of Shenzhen and the third is in Chengdu, capital of Sichuan province. The employees at those places have an average age of 23 and less than 6 percent of them are between the ages of 16 and 18.

The report also found that a large number of the workers do not live in crowded dormitories and that nearly 48 percent of them did not think the factories' canteens were clean and hygienic.

Many of the employees also said they would like to work more hours and make more money. Asked if their salaries were enough to meet their basic needs, 64.3 percent said "no", according to the report.

The employees' average monthly salary at the Chengdu plant was 2,250 yuan ($360). In Shenzhen plants in general, the average is 2,800 yuan.

The Fair Labor Association said Foxconn has agreed to bring its factory conditions both into full compliance with Chinese law and with the association's standards governing working hours by July next year.

Foxconn will have to hire and train a significant number of additional workers, build accommodation for them, and devise a means of compensating them for the income they lose through a reduction in their hours, the association said.

"We welcome the results of the audit by the (Fair Labor Association) report and Foxconn has participated fully and openly in this review," Foxconn said in a statement.

"We are committed to working with Apple to carry out the remediation program and we are fully committed to ensuring that our employees have a safe, satisfactory and healthy working environment."

Foxconn recently raised the base wages it offers by up to 25 percent, the second large pay raise it has granted in less than two years.

As far as safety violations, the Fair Labor Association found few of them, noting that Foxconn has already dealt with hazards such as blocked emergency exits and defective protective gear. The company has also taken steps to reduce the amount of aluminum dust in the air, it said.

Ye Jingyi, a labor expert at Peking University, praised Foxconn for agreeing to reduce the amount of overtime employees at its factories put in.

"All enterprises should obey the workers' overtime limit stipulated by law and properly pay them," she said.

"The planned wage-increase mechanism should be set up to make sure that workers' pay increases at the same pace that enterprises develop and the country's economy grows," she said.

Analysts believe the remedies Foxconn takes are likely to affect other international technology companies. Foxconn employs 1.2 million workers in China, having them assemble products not just for Apple, but also for Microsoft Corp, Dell Inc, Motorola Mobility Holdings Inc and Sony Corp.

The research company IHS iSuppli estimates that Apple pays $8 for the assembly of a 16-gigabyte iPhone 4S. If Apple were to absorb the cost of giving Foxconn employees a wage increase that is large enough to maintain their salaries when their average working hours are reduced from 60 to 49 a week, the company would pay less than $2 extra to have an iPhone made, the research company said.

Han Meng, a researcher with the Chinese Academy of Social Sciences' institute of economics, said international companies must decide if it is they or their customers that should pay for a rise in labor costs.

Tim Cook, Apple CEO, visited a Foxconn factory in Zhengzhou in Henan province on Wednesday. One day before that visit, Cook met Vice-Premier Li Keqiang in Beijing. During their talk, Li had told Cook that multinational companies should "pay more attention to caring for workers", according to Xinhua News Agency.

Reuters contributed to this story.