Consumer Electronics

Amazon's Chinese Contract Manufacturer Faulted for Worker Treatment

Paul Ausick

Published: June 10, 2018 8:18 am

Last Updated: January 11, 2020 10:33 pm

China Labor Watch (CLW), a watchdog organization based in New York and China, issued a report Sunday morning on worker treatment at a Chinese factory that assembles consumer electronics products for Amazon.com Inc. (NASDAQ: AMZN). CLW claims that a year-long investigation revealed a number of workers’ rights violations at the Foxconn factory in Hengyang.

Foxconn is China’s largest contract electronics manufacturing firm with more than 1.3 million workers. Most famously the company builds iPhones for Apple Inc. (NASDAQ: AAPL) and it also manufactures Xbox One for Microsoft Corp. (NASDAQ: MSFT) as well as Amazon’s Echo, Echo Dot, Kindle, and Fire tablet products.

CLW has enumerated a number of violations of Chinese labor law including excessive employment of dispatch workers who made up 40% of the Hengyang factory’s workforce, far above the legal limit of 10%. Workers may be required to work more than 100 hours a month of overtime during peak season with no overtime premium. Chinese law limits overtime hours to 36 a month.

The report was sent to Amazon in May, according to a report in The Seattle Times, urging the company to improve workers conditions at the factory. Amazon said it completed an audit of the Hengyang plant in March and “flagged” the company’s concerns with dispatch workers and overtime pay policies. An Amazon spokeswoman sent an emailed response to the newspaper:

We immediately requested a corrective action plan from Foxconn Hengyang detailing their plan to remediate the issues identified, and we are conducting regular assessments to monitor for implementation” and compliance with company standards. We are committed to ensuring that these issues are resolved.

According to CLW the average wage at the Hengyang Foxconn plant is about $700 a month, but that includes wages paid during the peak season. Off-peak wages average about $312 to $468 a month at an hourly rate of $2.26 for both regular and overtime hours worked. If a worker takes more than two days off in a month or is late for work more than twice a month, the hourly rate drops to $2.11 an hour.

Here’s a link to the CLW report and another to The Seattle Times story.