According to a study by The Information, Apple has been complicit in the abuses of Chinese labor laws by its suppliers. Suppliers have periodically packed their factories with temporary employees or “dispatch labor,” breaking a Chinese labor law restricting temporary employees to be no more than 10 percent of a plant workforce.
As in the US, temporary workers in China earn lower wages and fewer perks. According to The Information’s sources, they have become more widespread as interest in factory employment has declined. In 2014, the legislation banning the use of dispatch labor came into force. That year, Apple conducted a survey of its suppliers in China to determine how many had complied with it. According to a presentation The Information reviewed, the company found that among 362 plants, “about half were over the limit for contract employees.”
Not much had improved by 2016 and the conclusion of a grace period for enforcement, notwithstanding the number. “Three former members of the “supplier responsibility unit” of Apple said the company “did not take any meaningful measures against its vendors for breaching the temp-worker labor law because of fears that it would generate prices, drain money and disrupt releases of goods. If the allegations are valid, it is interesting because Apple says it equally extends its supplier code of ethics policy across its supply chain, which can avoid these forms of breaches.
New data obtained by Apple in 2018 reveals that the issue has persisted. The information reports that 5,000 temporary hires were employed by a Quanta factory producing Apple Watches to bring their staff to 18,000. That’s about 27% of temporary staff, over the 10% cap imposed by the legislation.
This is not the first time Apple’s watch has broken labor legislation. In 2019, in its dealings with Foxconn, Apple agreed to at least a portion of this dispatch labor issue. Despite previously promising several times to quit, Foxconn had breached the 10 percent cap. Yet another dealer, Pegatron, broke student labor regulations just last month and falsified his documents to cover it up. Apple’s recorded reaction was to place the firm on “probation,” prohibiting it from doing all-new Apple business until the matter was resolved.
Punishments have not yet been commonly implemented, considering the Pegatron example. Limits on temporary labor are an issue that is likely to be solved for all significant tech firms producing in China. Still, Apple’s ability to “surprise and delight,” along with retaining ambitious export quotas, has theoretically aggravated the problem. An unidentified Apple executive admits as much in a quotation from the report: “We are making it difficult for our suppliers to comply with this law as 10% dispatch is simply not enough to cope with the spikes in labor demand.”
Apple is aware that this is an issue, but vendors will take shortcuts to sustain Apple’s business before it can step in and take bolder steps.
