High schoolers work overtime on iPhone

Apple found that its main supplier in Asia has been employing high-school students working illegal overtime to assemble the iPhone X.

Interns at a factory operated by Hon Hai Precision Industry Co., part of Taiwan's Foxconn Technology Group, worked voluntarily and received benefits, though worked longer days than Chinese law permits, Apple said in a statement. The Financial Times reported earlier Tuesday that a group of 3,000 students from the Zhengzhou Urban Rail Transit School were sent to work at the factory.

"During the course of a recent audit, we discovered instances of student interns working overtime at a supplier facility in China," Apple said. "When we found that some students were allowed to work overtime, we took prompt action."

The students worked at the factory as part of a three-month stint that was billed as "work experience," and was required to graduate, The Financial Times reported. Six of the students told the newspaper they routinely worked 11-hour days assembling Apple's flagship smartphone, which constitutes illegal overtime for student interns under Chinese law.

Apple's supply chain has faced criticism over poor labor standards for years, and the company has pushed manufacturing partners to improve factory conditions or risk losing business. However, this year the company released two new iPhones for the first time, putting extra pressure on its suppliers and assemblers to churn out millions of handsets ahead of the key holiday shopping season.

"Ultimately it's about production needs. From Apple's actions, it seems like they don't care about the labor standards they set previously," said Li Qiang, founder of New York-based advocacy group China Labor Watch, which monitors working conditions in Apple's supply chain.

"Apple actually knew about this a couple of weeks ago, however they haven't resolved the issue yet," Qiang added. "They could have stopped these students working night shifts and long hours sooner, but they didn't do that."

Apple's latest model, the iPhone X, faced hiccups in production that stymied some suppliers and held back business for Hon Hai, which gets more than half its sales from the Cupertino, Calif.-based company. Hon Hai is the exclusive assembler of the iPhone X and Apple didn't start selling its marquee device until November, almost two months after the iPhone 8 hit shelves. The delay led to a 39 percent drop in Hon Hai's net income in the three months ended September.

Foxconn said company policy doesn't allow interns, who represent a "very small" percentage of its workforce, to work more than 40 hours a week on "program-related assignments."

Foxconn did acknowledge, however, a "number of cases where portions of our campuses have not adhered to this policy. We have investigated all of these cases and confirmed that while all work was voluntary and compensated appropriately, the interns did work overtime in violation of our policy."

Business on 11/22/2017

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