Apple is slated to release its much-anticipated iPhone 15 series this fall. The iPhone 15 Pro and iPhone 15 Pro Max, especially, have generated considerable buzz and attention. Pegatron Group, a Taiwanese electronics manufacturing company, is Apple’s second largest Chinese supplier. This past summer, it recruited large numbers of dispatch workers (or workers hired through third-party employment services) for its Shanghai and Suzhou factories in preparation for this launch. China Labor Watch (CLW) investigated Pegatron’s factories and found workers working around the clock to create these iPhones. While the world admires Apple’s newest technological achievement, few pay attention to the exploited laborers behind this product.
In the past, CLW has repeatedly discovered serious labor rights violations within Apple’s global supply chain. CLW’s July 2013 report discovered violations in three of Pegatron’s factories in Shanghai and Suzhou, including forced overtime, excessive use of dispatch workers, lack of training and insurance, and workplace harassment. The same violations resurfaced during CLW’s second investigation in October, 2015 at Pegatron Shanghai. This follow-up investigation found no significant improvement in Pegatron’s working conditions since CLW’s previous reporting.
Eight years later in June and July 2023, CLW sent an investigator to conduct fieldwork and interviews at Pegatron’s Kunshan factory (Pegaglobe). The factory is located in the Kunshan Economic and Technological Development Zone (KETD). It primarily produces the iPhone 15 Pro at the time of the investigation. CLW’s investigation found that issues in Pegatron’s Pegaglobe factory are consistent with those in Pegatron’s Suzhou and Shanghai factories. What’s most concerning to CLW is that working conditions have not changed significantly in the factory for the past ten years. As did in the past, the recruitment of a large number of dispatch workers, forced overtime, workplace bullying, and sexual harassment are still found in the factory.
As a leading non-governmental advocacy organization for Chinese worker rights and labor rights, CLW strongly condemns the conditions of Pegatron’s factories. As Pegatron’s client, Apple failed to fulfill its corporate social responsibility. CLW demands that Pegatron and Apple respond publicly, correct the illegal practices, and compensate the workers who were harmed in the production of Apple products.
Key findings from the investigation:
The recruitment process discriminates against workers based on region, ethnicity, religion, age, and gender.
While Pegatron’s recruitment posters and advertisements do not reveal restrictions on ethnicity or religion, in practice, the factory does not recruit Yi, Tibetan, and Uyghur ethnics. Pegatron’s hiring intermediary stated that as long as Uyghurs have no dietary restrictions, they are free to work at the factory. But adherence to Islamic dietary restrictions is an integral part of Uyghur religious identity, effectively making this requirement an act of ethnic discrimination.
Pregnant female workers are indirectly rejected during the recruitment process. If women are pregnant, they are not allowed to take an X-ray that is required during their physical exam. Women who fail to complete the physical exam are not allowed to work at the factory. This, in effect, is an implicit rejection of pregnant female workers. CLW investigators witnessed several pregnant female workers being rejected by Pegatron’s hiring intermediary.
The age limit for hiring in the factory is between 18 and 42. Workers are not allowed to dye their hair or have tattoos.
The acts above violate Article 12 of China’s Labor Law, which requires that “Laborers, regardless of their ethnic group, race, sex, or religious belief, shall not be discriminated against in employment.”
The factory exceeds the legal limit on the number of dispatch and hourly workers allowed to work at the factory. Labor disputes regarding rewards and bonuses are commonplace.
Regardless of whether the factory operates during peak season (high demand) or off-season (low demand), Pegatron employs a large number of dispatch workers and hourly workers. This number increases whenever Apple releases a new line of products. During the iPhone 15 Pro production, dispatch workers made up 70% of Pegatron’s workforce. This number is still increasing to this day. This excessive use of dispatch workers violates Article 4 of China’s Interim Provisions on Labor Dispatch, which states that “An employer shall strictly control the number of dispatch workers employed which shall not exceed 10% of the total number of its workers.”
During daily operations, dispatch workers are assigned to the highest intensity work tasks without any days off. At the end of 2020, Pegatron unilaterally lowered promised bonuses for dispatched workers, causing thousands of dispatched workers to protest.
CLW also found some of Pegatron’s intermediaries charge workers a fraudulent registration fee, which is a violation of Article 60 of China’s Labor Contract Law.
Excessive overtime is normalized. Workers must work at high intensity, and it is difficult to get 10 hours of rest per day.
Excessive overtime is normalized for both regular and dispatch workers. Monthly overtime reaches 84 hours during the low season and 97 hours during the peak season. This far exceeds the 36-hour monthly overtime limit imposed by Article 41 of China’s Labor Law.
Production targets for the assembly line are also extremely high, forcing workers to work at a high intensity pace. At the beginning of 2023, some dispatch workers worked 13.5 hours a day and did not rest for three consecutive weeks.
Workers stay in the factory for at least 12 hours a day. The dormitory is located far away, and the commute is long, requiring workers to go through an underground passage and climb flights of stairs. Due to these long hours, it is difficult to get at least 10 hours of rest.
Workers are not guaranteed to have a day off, even within a 14-day work period. In 2020, vocational school interns worked without a break for more than a month during the peak season of September, sometimes working overtime until 8 PM. This high-intensity overtime led to the sudden death of a vocational school intern in October 2020. Afterwards, Pegatron no longer openly recruited interns through collaborations with vocational schools. However, interns were still allowed to the factory as individuals.
Social insurance is not covered, despite claims to the contrary.
According to the Social Insurance Law and the Regulations on the Management of Housing Provident Funds, employers are required to purchase five social insurances (medical, pension, unemployment, work-related injury, and maternity) for employees during their first month of employment, and one housing fund during their second month of employment (“Five Social Insurances and One Fund”). Contracts for both regular and dispatch workers state that the factory is required to purchase five social insurances for workers.
In practice, Pegatron purchases social insurance for workers’ for the second and third months of working only after four months of employment. The factory does not purchase social insurance for workers employed for under three months. Even if workers receive social insurance for their second and third month of work, they do not obtain the benefits for their first. Pegatron’s labor agency informs workers that Pegatron does not pay social insurance for all dispatch workers. Instead, it randomly selects workers and covers their social insurance in order to bypass random labor inspections.
Dispatched workers are generally recruited on a short-term basis. If a dispatch worker wants to continue working past their terms, they need to apply to become a regular worker. Few choose to become regular workers, meaning that the majority of the workers in Kunshan Pegatron are temporary, staying in the factory for around two months. This fact combined with the randomized nature of provided coverage makes it likely that Pegatron does not cover social insurance for the vast majority of their workers.
Workers who pay social insurance state that the factory does not issue social insurance cards. It also does not purchase any housing fund. These are all violations of social insurance requirements as stipulated by China’s Labor Law, Labor Contract Law, Social Insurance Law, and Regulations on the Management of Housing Provident Funds.
Workplace intimidation, humiliation, and punishment are common.
In September 2020, Kunshan Pegatron staff threw some dispatch workers’ IDs on the ground while calling out their names, forcing workers to bend over and pick up their IDs. The incident was publicized and triggered public criticism and worker protest.
Workplace bullying is commonplace. Assembly line leaders insult and belittle production line workers on a daily basis. There are many non-written rules that workers are not informed of but randomly punished for. Punishable items include wearing uniform pants at work, eating snacks, not wearing hats properly, not wearing masks properly, having dusty desktops, crossing their legs at work, and not neatly placing chairs back in the office.
Workers who make mistakes have their demerits recorded. They can be insulted by the team leader as a result or transferred to higher-intensity assembly lines. Regular workers can have performance appraisal subsidies deducted. Repeat violations result in dismissal.
Pegatron factory management intimidation tactics are a frequent topic of discussion on the Chinese Internet. The bullying is disrespectful, humiliating, and psychological harmful. No decent and responsible company should treat its workers this way.
Sexual harassment is widespread.
CLW’s investigator witnessed and experienced numerous cases of sexual harassment. The harassment was verbal and came from male coworkers and supervisors on a daily basis.
Sexual harassment is perpetuated by patriarchal gender norms and institutionalized within workplace hierarchies. The factory’s regulations prohibit sexual harassment. But female workers often distrust the factory’s available resources and whistleblowing mechanisms, feeling that there are no realistic options. Instead of reporting sexual harassment, female workers opt to keep quiet or quit. This contrast between what is emphasized and what actually gets reported shows that the factory’s sexual harassment training is just a client-facing formality.
Workers lack labor rights organizations that actually represent their needs. There are no mechanisms for workers to air out their grievances.
Workers in the factory have never heard of the existence of a union. Workers are told to ask the director’s office for help if they want to resign, have issues with their line leader, are insulted, encounter sexual harassment, or have other problems. But workers do not trust this internal grievance system. Since workplace bullying is often perpetrated by superiors, workers often choose to quit instead of fighting for their rights within the factory. There is a labor rights hotline for employees, but no workers inquired have used it.
Other violations of laws and regulations in the factory
- Safety training is less than 2 hours, far less than the minimum 24 hours required by the law.
- When workers sign contracts, they are not given enough time to read the details, violating the principle of informed consent.
- It is difficult for workers to apply for and get approval for sick leave and personal leave.
- Workers lack freedom of communication. Workers cannot access their phones even during meal breaks.
- Workers are not regularly tested for occupational illnesses, including those who have been exposed to hazardous substances.
Overview of Investigative Findings
- Discrimination during the recruitment process based on region, ethnicity, religion, age, and gender. The factory does not recruit pregnant female workers, workers from the Yi, Tibetan and Uyghur ethnic groups, and workers outside the age limit of 18-42 years.
- Ill treatment of workers who display some range of negative emotions.
- Recruitment fees: Job applicants must pay 30 yuan for their own medical exams.
- Inadequate training: Only 2 hours of safety training, far less than the minimum 24 hours required by law. The training also does not cover job skills or safety procedures. Answers to the training exam are given to workers to copy.
- Excessive use of dispatch and student workers. More than half of the factory’s summer dispatch workers are students (college, technical secondary, undergraduate, etc.).
- Past recruitment of vocational school students. Interns worked overtime and night shifts and were threatened by instructors that they would not graduate if they quit.
- Deceptive hiring intermediaries manipulate young seasonal workers into unfair work arrangements.
- Labor disputes over dispatch workers’ remuneration occurred: The factory previously unilaterally lowered their bonuses.
- Workers are required to pay work supply fees of 150-300 yuan, far exceeding the actual price of work supplies.
- Difficulty resigning: Resignation requires manager approval and is often rejected. In most cases, workers choose to self-quit.
- Lack of fully informed consent when workers sign the labor contract: Workers are not given enough time to read the contract and do not understand the terms and conditions.
- Difficulty applying for and getting approval for sick leave and personal leave.
- Excessive overtime: Workers typically work up to 84 hours during the low season and 97 hours during the peak season. This far exceeds the legal 36-hour per month limit.
- High labor intensity and impossible production targets.
- No guaranteed rest for 14 days work periods. It is difficult for workers to get 10 hours of rest per day.
- Forced overtime: Workers are told during the recruitment process, “If you don’t want to work overtime, find another job.”
- Inadequate meal times: Workers receive a 50 minute lunch break and 30 minute dinner break. They often do not take dinner breaks.
- Unpaid time: Workers must attend a 10 minute unpaid meeting every day, totaling 4 hours and 20 minutes a month.
- Lack of freedom and movement on the assembly line: Workers must find replacements whenever they take breaks, and approval is a fickle process that depends on the line leaders’ personal mood. Even when workers get breaks, they last only 5 minutes.
- Lack of transparency regarding performance bonuses: Bonuses are determined by team leaders and take into account the worker’s network.
- Lack of insurance: The factory claims to purchase insurance. But it does not purchase insurance for any workers’ first month of work as legally mandated. It only offers insurance for workers after their second and third months of work during their first fourth month of employment. Workers who have been at Pegatron for less than three months do not receive insurance.
- No social security card is provided for workers who do receive insurance.
- Inadequately used wellbeing facilities due to overlapping opening and work hours, closed venues, and high labor intensity.
- Lack of storage space in dorms for personal belongings.
- Overly expensive, salty, oily, and overall poor-tasting food with long lines in the cafeteria.
- Lack of freedom of communication: Workers are not allowed to use their phones even during meal breaks.
- Serious workplace bullying issues: Workers are often punished and transferred for unintended mistakes.
- Widespread sexual harassment: CLW’s investigator experienced and witnessed verbal sexual harassment from male coworkers and supervisors on a daily basis.
- Lack of union representation and internal grievance mechanisms.
- No environmental health and safety committee: Employees do not receive safety training on these topics before starting work.
- No regular exams to test for occupational diseases, even for workers who are exposed to toxic substances on a daily basis.
- Confusingly marked exits and passageways: Some passageways are marked as exits even though they are not, and some doors are unusable because of piles of goods blocking the way.
- No fire drill training.