Amazon.com Inc and its Chinese supplier Foxconn Technology Group (富士康) have moved swiftly to tackle illegal working conditions exposed in an investigation by the Observer and rights group China Labor Watch.
Temporary workers hired without basic rights, such as sick pay and holiday pay, have been offered staff contracts, and managers have been told to hire more workers to reduce levels of overtime.
The company says it is also taking action to tackle “confusing” overtime payments.
Amazon last week said that independent auditors had uncovered issues of concern at the factory in Hengyang, China, making its Kindle tablets and Echo and Echo Dot smart speakers.
The investigation and the audit found that Foxconn had hired too many agency workers — known as dispatch workers — in breach of Chinese labor laws and that payslips showed they had been paid a flat rate for overtime and regular work, instead of the time-and-a-half required by law. Excessive levels of overtime were also recorded.
China Labor Watch executive director Li Qiang (李強) welcomed the changes, but called on the companies to ensure workers were not left out of pocket.
“It is good to hear Foxconn is addressing the violations found at the factory,” he said. “However, we hope both Amazon and Foxconn will ensure the dispatch workers, who were previously underpaid, receive the overtime pay they were entitled to in accordance with Chinese labor law.”
“This includes paying the dispatch workers who have already left the factory the wages they are owed,” he said.
Foxconn issued a statement to the Observer saying it was addressing several issues identified in the factory. It said it had found that at peak periods, the number of temporary workers in the factory did “exceed targets and limits.”
Agency workers can be laid off without pay when production falls and Chinese labor law restricts their use to just 10 percent of the workforce.
Foxconn said it found that some agencies supplying staff had been taking payments for providing social insurance without passing on the benefits to the workers.
“We are revamping the recruitment policy at our Hengyang campus. We will convert these dispatch workers, should they wish to do so, into regular probationary employees, who can transition to regular employees after successfully completing three months of work,” Foxconn said.
“Our management team in Hengyang has also reminded all recruitment agencies of the need to comply with Chinese law and our requirements, including ensuring that each worker receives a copy of the labor contract they sign with the recruitment agency,” it said.
“Foxconn will immediately terminate our relationship with any agency that does not comply with our requirements,” it said.
The company claimed that it had paid agency workers an “aggregate” hourly wage that included overtime, but admitted this might be “confusing.”
“While most of our operations were in compliance with our code of conduct, unfortunately, there were some instances where practices were not consistent with our code or the supplier requirements of our customers. We have taken immediate actions to bring them into compliance,” Foxconn said.
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