Apple suspends business with Pegatron on China labor abuse

Apple Inc. has suspended new business with iPhone assembler Pegatron Corp. after learning labor violations at a student workers’ program. Apple shared in media saying it discovered several weeks ago that the Taiwanese manufacturer misclassified student workers and allowed some to work nights and overtime in violation of Apple’s Supplier Code of Conduct. Employees then “went to extraordinary lengths” to cover up the violations. It’s since placed its partner on probation until corrective action is completed, the U.S. company said in a statement.

The news, which was first reported by The New York Times, highlighted that Apple has placed Pegatron on probation and Pegatron will not receive any new business from Apple until they complete all of the corrective actions required. 

Further, Apple said it didn’t find evidence of forced or underage labor in Pegatron’s case, but discovered the supplier falsified paperwork to hide violations. Pegatron has fired the manager who oversaw the student worker program.

Pegatron said the violations took place at its Shanghai and Kunshan campuses in eastern China and that students working night shifts, over-time, and in positions unrelated to their majors were “not in compliance with local rules and regulations.” It said it’s taken “quick action” to strengthen its procedures, and will add adherence to the code of conduct to metrics used to evaluate senior management.

“Upon discovery of this non-compliant activity, we immediately took the student workers off production lines and worked with our customer and third-party experts to make appropriate arrangements for them to return to their homes or schools with proper compensation alongside all necessary support and care,” Pegatron said in a statement.