Fair Labor Association Reaches Agreement with Foxconn on Working Hours and Pay

Following an audit of Foxconn's facilities where the company assembles Apple products, the Fair Labor Association (FLA) today announced that it has reached an agreement with Foxconn that will result in stricter controls over working hours and an examination of salaries paid to workers at the facilities.

Foxconn has committed to bring its factories into full compliance with Chinese legal limits and FLA standards on working hours by July 2013, according to its remediation plan in FLA's report. The supplier will bring working hours in line with the legal limit of 49 hours per week, including overtime. This means a reduction in monthly overtime hours from 80 to 36, and would be a significant improvement given that most of the technology sector is struggling to address excessive overtime.

More importantly, while employees will work fewer hours, Foxconn has agreed to develop a compensation package that protects workers from losing income due to reduced overtime. In order to maintain capacity while reducing workers' hours, Foxconn committed to increase its workforce significantly as it builds additional housing and canteen capacity.

During its audits, the Fair Labor Association found numerous violations of both Chinese labor laws and FLA standards when it comes to working hours, with average workload coming in at over 60 hours per week during peak times. Instances of unfair overtime pay were also uncovered, with overtime payments only being made in 30-minute increments. Consequently, workers received no pay for overtime work of up to 29 minutes, while workers putting in 30-59 minutes of work received pay for only 30 minutes' worth of work.

apple fair labor association logos
The FLA found several other issues in its audits, ranging from health and safety to lack of worker union representation. Full details on the results of the FLA's audits are available through the organization's website. The FLA will continue to monitor Apple's and Foxconn's efforts at compliance, and will post follow-up reports on its investigations.

Top Rated Comments

blow45 Avatar
116 months ago
Chinese labour law is an oxymoron
Score: 13 Votes (Like | Disagree)
blow45 Avatar
116 months ago
While this is good, don't be surprised (or complain) when the price of your Apple gear starts to go up! Something has to give.

And as we all know apple's margins are way too low to give....:cool:
Score: 10 Votes (Like | Disagree)
Will do good Avatar
116 months ago
$500 for an ipad and the foxconn employees MAKE LESS THAN $1 PER HOUR.


OMG

What does iPad cost and less than $1 /hr have to do with anything? Apple don't own Foxconn, Foxconn is a supplier to ALL the electronic companies. Have they all agree to raise they hr wage to Chinese workers too? or should this be just Apple issue?

The cost of living is different in China than the US. etc.. etc.. read and understand how the world really is, Foxconn have hundreds and thousands of workers standing inline applying for job at each job fair, if you think these better options elsewhere, please advice.
Score: 6 Votes (Like | Disagree)
BadPirate Avatar
116 months ago
Missing context

This means a reduction in monthly overtime hours from 80 to 36, and would be a significant improvement given that most of the technology sector is struggling to address excessive overtime.

Seems to me like we could agree that mandatory (or compulsory) overtime is an evil... but what about voluntary overtime?

If you really want to work 80 hours a week because you want / need the extra money... are we really doing you a favor saying you can't?

What's important is that you can't be fired or otherwise passed over due to NOT working overtime... But overtime (even lots of it) seems to be a personal value (or not)...
Score: 6 Votes (Like | Disagree)
FFArchitect Avatar
116 months ago
Is there documentation/attention to this issue for other companies? (Sony, Samsung, etc)
Score: 6 Votes (Like | Disagree)
Analog Kid Avatar
116 months ago
The confluence of the report, Apple's response, and trends in China itself means that they will need to hire 20% more employees to conform to the per worker hourly reduction pledge. Wage prices in China reliably go up 15% per year and the Chinese Rimimbi currency is all but locked against the dollar.

Now this does have the offset of paying less overtime by about 10-15%.

But overall we should see a labor component cost increase of about 15% per year with it being a bit front loaded as compliance ramps.

The single easiest way to have things cost us less is to borrow and spend less at the Federal government level. It is causing currency destruction at a rate of about 7% a year reliably under the Obama Presidency. We currently deficit spend at the shocking rate of about $250B a MONTH and we were promised stimulus would be one time and about $866B with a then ANNUAL deficit of about $450B.

The TARP, Fed actions, and such are large in scale to the tune of about $7T, about the same scale as the liquidity lost when home prices vaporized $7.5T in about a year and a half. The Fed has "sterilized" those actions, but they are real, have to be unwound some day and there are hard costs to real people to keeping interest rates ridiculously low. Also most of TARP and bank liquidity has been paid back with over $100B in net profit paid into the treasury already.

All of that stuff together makes it cost us more for gasoline (30% since Obama's budget was passed on currency destruction alone, no issues from oil speculation or Iran included in that), food, commodities, and payments to China.

In the CNBC interview the FLA President characterized the forward leaning of Apple and Foxconn on labor issues in China as likely to lead to a "race to the top". For those of us critical of Chinese policies of various types, this is only good. It is also having direct impact on large parts of Chinese society.

So I call it a mixed picture but far more good than bad, and slightly bad for forward earnings of AAPL.

Rocketman

Rocketman? Your comments are usually so insightful and well targeted, I don't understand the hysterical incoherent rant...

I'm not sure what you mean by "currency destruction"-- the only links I can find to it are either the physical destruction of used bills, or Ron Paul nonsense... If what you mean is inflation:

We're well below historical levels.

If you mean the dollar exchange rate:

We haven't really moved from where Bush left us, and frankly I think the dollar is still too strong. You can argue in favor of cheaper prices, but we're not going to get the trade deficit under control, or boost demand for US products, until the dollar falls against foreign currencies, particularly the renminbi.

You can complain about deficits, but the deficit has fallen every quarter since Obama took office, and we're already back to less than the average Reagan deficit which is remarkable given the magnitude of the hit to revenues:


Low interest rates are a net benefit to anyone carrying a mortgage or invested in the stock markets and only really a bummer to people heavily invested in treasury bonds-- mostly big investment houses. To say there are hard costs to real people in keeping interest rates low is suggesting that real people are forced to invest in treasury bonds and the Fed is punishing them. The whole point of low interest rates is to discourage people from lending their money to the government and encourage them to invest it in the broader economy-- if people are insisting on holding treasuries, they either masochists, or don't see it as a hard cost.

And gasoline prices?:

They took a dive when we thought the world was ending, and now they're still below the Bush peak in nominal non-inflation adjusted dollars, not to mention real dollars or previous trend:


And frankly, if you look at the inflection points the rise in prices has much more to do with this (more negative is more imports):

than "currency destruction" or whatever you're blaming the government for.
Score: 5 Votes (Like | Disagree)

Top Stories

jon prosser imac 2021colors

Prosser: 2021 iMac to Come in Five Colors, Apple Silicon Mac Pro to Resemble 'Stacked' Mac Minis

Wednesday February 24, 2021 7:26 am PST by
Hit-and-miss leaker Jon Prosser has today alleged that the upcoming 2021 iMac models will offer five color options, mirroring the colors of the fourth-generation iPad Air, and revealed a number of additional details about the Mac Pro with Apple Silicon. In a new video on YouTube channel FrontPageTech, Prosser explained that the redesigned iMacs will come featuring options for Silver, Space ...
2021 mbp sd slot feature2

Kuo: New MacBook Pro Models With HDMI Port and SD Card Reader to Launch Later This Year

Monday February 22, 2021 8:52 pm PST by
Apple plans to release two new MacBook Pro models equipped with an HDMI port and SD card reader in the second half of 2021, according to analyst Ming-Chi Kuo, who outlined his expectations in a research note obtained by MacRumors. The return of an SD card reader was first reported by Bloomberg's Mark Gurman last month. "We predict that Apple's two new MacBook Pro models in 2H21 will have...
m1 mac mini

M1 Mac Users Report Excessive SSD Wear

Tuesday February 23, 2021 7:07 am PST by
Over the past week, some M1 Mac users have been reporting alarming SSD health readings, suggesting that these devices are writing extraordinary amounts of data to their drives (via iMore). Across Twitter and the MacRumors forums, users are reporting that M1 Macs are experiencing extremely high drive writes over a short space of time. In what appear to be the most severe cases, M1 Macs are sai...
iphone 12 pro display video

BOE Rumored to Supply iPhone 13 Display Panels After iPhone 12 Failures

Monday February 22, 2021 9:54 am PST by
Display manufacturer BOE will be one of the main suppliers of OLED panels for iPhone 13 models, according to a new report today from Taiwan's Economic Daily News. BOE is said to be working with touch panel manufacturer General Interface Solution (GIS), part of the Hon Hai Group to develop OLED panels. Multiple iPhone 12 rumors suggested that BOE would supply some panels for the devices,...
flat mbp 14 inch feature yellow

Redesigned 14-Inch MacBook Pro Expected to Feature Brighter Mini-LED Display With Slimmer Bezels and More

Thursday February 25, 2021 7:48 am PST by
Apple plans to unveil new 14-inch and 16-inch MacBook Pro models with Mini-LED-backlit displays in the second half of this year, according to industry sources cited by Taiwanese supply chain publication DigiTimes. The report claims that Radiant Opto-Electronics will be the exclusive supplier of the Mini-LED backlight units, while Quanta Computer is said to be tasked with final assembly of the...
anker magsafe powercore battery pack

Anker Releases MagSafe-Compatible Battery Pack for iPhone 12 Lineup

Tuesday February 23, 2021 7:49 am PST by
Following rumors that Apple is working on a MagSafe battery pack for iPhone 12 models, popular accessory maker Anker has beaten Apple to the punch with the release of its PowerCore Magnetic 5K Wireless Power Bank. First previewed at CES 2021, the PowerCore battery pack magnetically attaches to the back of any iPhone 12 model and provides 5W of wireless charging. With a 5,000 mAh capacity,...
iPad Pro Mini LED

New iPad Pro and MacBook Models With Mini-LED Displays Again Rumored to Launch This Year

Monday February 22, 2021 9:32 pm PST by
Taiwanese company Ennostar will begin production of Mini-LED backlight units for an upcoming 12.9-inch iPad Pro in the late first quarter or second quarter of this year, according to industry sources cited by DigiTimes. Ennostar is a holding company that was jointly established in January 2021 by LED-related manufacturers Epistar and Lextar Electronics. Apple is expected to unveil the new ...
First Look Big Sur Feature2

Apple Releases macOS Big Sur 11.2.2 to Prevent MacBooks From Being Damaged by Third-Party Non-Compliant Docks

Thursday February 25, 2021 10:07 am PST by
Apple today released macOS Big Sur 11.2.2, the fourth update to the macOS Big Sur operating system that launched in November. macOS Big Sur 11.2.2 comes two weeks after the release of macOS Big Sur 11.2.1, a bug fix update. The new ‌‌‌‌macOS Big Sur‌‌‌ 11.2.2‌ update can be downloaded for free on all eligible Macs using the Software Update section of System Preferences....
steam apple logo

Valve Ordered to Give Apple Information on 436 Steam Games As Part of Epic Games Legal Case

Thursday February 25, 2021 1:50 am PST by
Valve, the makers behind popular game distribution platform Steam, will be forced to hand over aggregate historical sales, price, and other information on 436 games hosted on the store to Apple, as part of the Apple vs. Epic Games antitrust case. As reported in a paywalled report by Law360, during a virtual discovery hearing on Wednesday, U.S. Magistrate Judge Thomas S. Hixson ordered that...
scott forstall original iphone

Epic Games 'Attempting to Locate' Former iOS Chief Scott Forstall to Testify in Ongoing Legal Battle with Apple

Tuesday February 23, 2021 4:22 am PST by
As part of its ongoing legal battle, Epic Games is now seeking testimony from Apple's former iOS software chief, Scott Forstall. Forstall left Apple in 2013, in what was widely reported at the time to have been a forced exit, largely because of the botched early launch of Apple Maps. Since then, Forstall has kept a very low profile and has only made a few media appearances in the past few...