Amazon's Supplier Factory Foxconn Recruits Illegally: Interns Forced to Work Overtime

In 2018, China Labor Watch (CLW) conducted an investigation into Hengyang Foxconn. The investigation found the factory recruited a large number of dispatch workers, which was well over the legal limit, forced workers to work excessive overtime, among other rights violations. Amazon and Foxconn responded that they would make improvements to the factory’s working conditions. However, CLW’s 2019 investigation found that Foxconn’s working conditions have deteriorated. Workers put in more overtime hours, wages decreased, and the factory illegally recruited a large number of dispatch workers and interns. Interns were forced to work overtime and night shifts. According to workers, the factory is preparing to move a production line to Vietnam in September.

Key issues in this year’s investigation -

Interns

On July 26^th, 2019, Foxconn already recruited 1581 interns from vocational schools, and the factory is currently recruiting more. The interns earned 1750 RMB/month ($248), or 10.05RMB/hour ($1.42/hour), when in 2018, they earned 1950 RMB ($276). Compared with 2018, interns in 2019 did not receive living stipends and employment rewards, in addition to other bonuses. If interns put in 234 hours a month, then in 2018 the labor cost was 5186 RMB ($735), but in 2019, this decreased to 3872.04 RMB ($548). Schools sending interns to work at the factory included Sinosteel Hengyang Heavy Machinery Workers Technical College, Hengyang Technician College, Hengyang Vocational Secondary School, Hengyang Industrial Workers College, Hengnan County Technical School. Interns are required to work 10 hours a day, and this includes two hours of overtime, in addition to working six days a week. A number of interns were arranged to work night shifts. If interns were unwilling to work overtime or night shifts, the factory would arrange for teachers to pressure workers. For interns who refuse to work overtime and night shifts, the factory requests teachers from their schools to fire them. Teachers often physically and verbally attack interns, and on July 30, many workers witnessed a teacher hitting an intern. The teacher aggressively grabbed the intern by the ear, did not let him swipe out of work and scolded him. To coordinate with the factory’s production, teachers who were assigned to the factory gave interns immense pressure. These teachers were also provided a 3000 RMB ($425) subsidy from the factory. The school received 3RMB ($0.42) for every hour an intern worked.

Dispatch Workers

On July 26^th, 2019, the factory had 2545 dispatch workers, which is 34.2% of the total number of workers. In 2018, CLW’s report revealed that the factory had hired a high number of dispatch workers, violating Chinese labor law. Workers also put in excessive overtime hours. Amazon issued a response stating that after an initial investigation and audit, Hengyang Foxconn factory had violated Chinese labor laws, hiring a large number of temporary workers. However, after one year, there has yet to be any improvement to Foxconn’s illegal recruitment practices. Currently, there are several dispatch companies such as Qizhong, Feihong, Huahuisheng, Ningbo Tiankun helping Foxconn recruit temporary workers. The dispatch workers pay rate is 14.50 RMB/hour ($2.06/hour) this year, and for every hour they work at the factory, the dispatch company will receive a bonus of 3.5 RMB ($0.50) from Foxconn.

Overtime Hours

The factory uses a two-shift system: a day shift and night shift. During off peak season, workers have to work between 60 to 80 overtime hours a month and receive one day off a week. During peak season, overtime hours were between 80 to 140 hours a month. Peak season begins in July every year. According to the Responsible Business Alliance, work hours should be limited to 60 hours per week, including overtime, and workers should have at least one day off a week. However, according to the information we received, in July 2019, there were 375 workers violating this overtime standard. The factory has to produce a large number of orders for Amazon in August, hence workers have been working overtime recently. Many production line workers have put in over 60 hours a week and do not receive a day of rest a week. In order to finish the production goal, some workers only had two days off for the entire month in July.

We found that some of the working conditions at Hengyang Foxconn remained the same. The factory deducts 400 RMB in social insurance fees from regular workers’ wages every month, six workers share a dormitory room and workers are still unfamiliar with the labor union and do not know of any worker representatives.

CLW’s Executive Director, Li Qiang, says: “Despite being illegal, Foxconn still recruits a high number of dispatch workers and interns as a means to cut labor costs. China’s labor laws are also not strictly enforced.”

Violations at Amazon’s supplier factory Foxconn

1. Interns working night shifts: Although regular workers are working night shifts, Foxconn is still experiencing a labor shortage. Hence, interns are required to work night shifts. Some interns were unwilling to work overtime and night shifts. The night shift leaders and school teachers gave pressure to interns, and for those who still refused to work overtime and night shifts, teachers helped the factory fire the interns. (Picture 2,11 and 14 in report.) This violates Article 16 of “The Administrative Provisions On the Internships of Vocational School Students”, which stipulates that “employers must not arrange overtime work and night shifts for students”.

2. Interns working overtime: Interns will contribute to completing the production goal, as such, interns need to work overtime. A number of interns put in 10 hours a day, which includes eight regular work hours and two hours of overtime. (Picture 2 in report.) This violates Article 16 of “The Administrative Provisions On the Internships of Vocational School Students”, which stipulates that “employers must not arrange overtime work and night shifts for students”.

3. Intern wages have decreased: In 2018, the base wage was 1950 RMB ($276), the employment bonus was 200 RMB/month ($28/month), and the living stipend was 100 RMB/month ($14/month); in 2019, the base wage for students was 1750 RMB ($248) and they received less subsidies and bonuses compared to 2018.

4. Regular workers wages have decreased: In 2018, the base wage was 1950 RMB ($276), there was a 200 RMB/month ($28/month) recruitment bonus and a 100 RMB/month ($14/month) living stipend; in 2019, regular workers’ wages were 1750 RMB ($248) and they received less subsidies and bonuses compared to 2018.

5. Proportion of dispatch workers exceeds legal limits: There are currently 7435 workers in total, which includes 2545 dispatch workers. Hence, dispatch workers make up 34.2% of the workforce. (Picture 25 in report). This violates Article 4 of the “Interim Provisions on Labor Dispatch”, which states, “employers are to strictly control the number of dispatch workers they employ. The number of dispatch workers must not exceed 10% of the workforce”.

6. Proportion of interns exceeds legal limits: There are currently 7435 workers in total, which includes 1581 interns. Interns make up 21.3% of the workforce. (Picture 25 in report). This violates Article 9 of “The Administrative Provisions On the Internships of Vocational School Students”, which stipulates that “the number of interns shall not exceed 10% of the total number of employees in the company.”

7. Teachers staying at the factory with students, cooperated with the factory to force interns to work overtime and night shifts, as the factory provides an additional 3000 RMB/month ($425) subsidy to every teacher. (Picture 2 in report)

8. The school cooperated with the factory to deliver large numbers of interns, and ignored the fact that the factory was forcing interns to work overtime and night shifts. The factory paid an additional 3 RMB($0.42)/ hour/person subsidy to school, for three months in total. (Picture 11 in report)

9. Excessive overtime work without any rest days: The factory usually restricts work hours to 60 hours a week, including overtime. Workers will not be able to clock into work once they have recorded 60 work hours a week. However, when the factory receives a large number of orders, each department will remove this work hour restriction, and allow workers to clock in to work despite already putting in 60 hours that week. At the same time, 375 workers were asked to work overtime on Sunday and did not receive any rest days during the week. (Picture 25 in report). This violates Article 3 of the “Responsible Business Alliance”, which stipulates that “total hours worked should not exceed local or national standards, or 60 hours per week, whichever is stricter. Workers need to have at least a scheduled day off in every 7 days”

10. Teachers verbally and physically attack student workers: To coordinate with the factory’s production and regulation, on July 30, a teacher verbally abused and attacked a student worker in the factory. That teacher grabbed the intern by the ear, pushed him and threatened the intern verbally.

11. Amazon may have known about the issue regarding Foxconn’s illegal recruitment of dispatch workers: According to an internal document, Foxconn mentions they will try to reach an agreement with Amazon about allowing dispatch workers exceed 10% of the workforce during peak season. If Amazon knew about this, then Foxconn and Amazon together, violated the standard regarding the proportion of dispatch workers. (Picture 2 in report). This violates Article 4 of “Interim Provisions on Labor Dispatch”, which stipulates that “an employer shall strictly control the number of dispatched workers employed which shall not exceed 10% of the total number of its workers.”

12. The local government intervened in the intern program at Hengyang Technical College: According to an internal document, Foxconn mentions they are hoping Hengyang Technical College will send 600 students as interns. Hengyang Technical College decided that they can send 600 students, but the students would only be able to work for two months (Mid-Sep. to Mid-Nov.). Foxconn would like to ask interns to stay for one more week and complete their internship at the end of November. The government negotiated with Hengyang Technical College, to ensure that students would be able to extend their internship for one additional week. (Picture 2 in report). This violates Article 9 of “The Administrative Provisions On the Internships of Vocational School Students”, which stipulates that “any unit or department should not interfere with the arrangement and implementation of the student internship program in vocational schools, and may not force vocational schools to arrange students to intern at a specific work unit”.

13. Interns have to keep their heads down at the workstation for an extended period of time and do repetitive motions. The frequency of their motions is more than 50 times per minute when they are at workstations. Our investigation found that interns were working at the same position as regular workers, including overtime and night shifts. The factory set production goals for interns everyday. These activities violate Article 3 of the “Provisions of Juvenile Worker Protection”, which states that “Juvenile workers are not to engage in work positions that requires them to keep their heads down, backs bent, doings lifts or squats, etc. for a long period of time. The frequency of their motions cannot be more than 50 times per minute on the production line”.