China Labor Watch says workers’ rights continue to be violated by Pegatron

A new report from China Labor Watch, a labor rights watchdog and advocacy organization, says there are are continued workers’ rights violations at factories owned by Pegatron. Pegatron is an electronics manufacturing company that develops mainly computing, communications and consumer electronics to branded vendors, including Apple.

“Working conditions are terrible, and workers are subject to terrible treatment. Currently, Apple’s profits are declining, and the effects of this decline have been passed on to suppliers,” writes China Labor Watch. “ To mitigate the impact, Pegatron has taken some covert measures to exploit workers. This report is based on interviews with Pegatron workers and a comparative study of 2015 copies of paystubs collected in 2015 and 2016. Through our investigation, we have found that Pegatron has taken some surreptitious measures to pass Apple’s audits. In addition, we discovered that Pegatron’s working conditions have worsened in 2016 compared to 2015.”

The report claims there are several critical issues:

  • The average wage in China has been increasing steadily. However, at Pegatron, workers’ wages dropped significantly in the past eight months.
  • 2. The Shanghai Municipal Government raised the minimum wage from US$304 to $330 in April 2016, and Pegatron workers indeed received a raise in wages. However, Pegatron managed to control labor costs by cutting welfare and sharing insurance payments with workers. As a result, workers’ total income decreased after the raise. Pegatron’s attitude toward workers is evident here. In 2015, workers’ hourly wage was $1.85. In 2016, workers’ hourly wage increased to $2.00, and after deductions, this amounts to only $1.60.
  • Excessive and illegal overtime work is still prevalent in Pegatron. Pegatron claimed that their ID check system could effectively control workers’ overtime hours, but this system did not have any effect in the departments where more overtime was needed. It is merely a tool for public relations. Paystub records reveal that the highest amount of overtime hours put in by a worker was recorded in March, which was a worker with 109 overtime hours. The worker was found to have put in a total of 293 hours of work in March.
  • Pegatron has recruited many student interns, who had overtime work amounting to 80 hours per month on average. This is roughly the same amount as full-time employees. However, the Chinese law forbids companies from asking interns to work overtime.
  • The base wage is still too low in Pegatron, and workers have to rely on overtime pay to support themselves and their families. Workers who do not work overtime only earn around $213 USD after expenses are deducted.
  • In most of the production lines, workers have to arrive at work 10 minutes earlier than the regular schedule, but the 10 minutes are not paid.
  • Workers spend about 60 minutes each day, passing through the security procedures and ID Checks before entering workshop. The ID Check system did not control excessive overtime, however, encroached on workers’ rest time.
  • The factory forces workers to work overtime, and those who ask for leave would usually not be approved.
  • Workers are exposed to potential occupational injuries without proper protection. For example, in departments that have noise and the use of lasers, the factory does not provide them with protection equipment.

Apple hasn’t yet responded to the report (which was just released).