Contract manufacturer Foxconn has agreed to sweeping changes to its operations to address working conditions, in a move that some suggest could have implications for the entire Chinese manufacturing sector.
Foxconn has agreed to eliminate excessive overtime, increase its workforce significantly and raise worker pay in response to the audit from the Fair Labor Association, the workers' rights body revealed late last week.
The audit, requested by key Foxconn customer Apple, found “significant issues with working conditions” at three factories inspected, according to the FLA.
These included illegal amounts of overtime, health and safety risks and communication gaps between management and staff on the ground. Around 64% of employees also feel that they are not paid enough to meet their basic needs.
In response, Foxconn has agreed to restrict workers' hours to 49 per week including overtime, which would mean a reduction in overtime hours to 36 from 80.
The manufacturer has promised to develop a compensation package that would prevent workers from losing income as a result of the reduced overtime.
Foxconn and Apple have both also agreed to pay workers retroactively for any unpaid overtime, and increase salaries to meet the requirements for basic needs.