Investment that creates workers’ misery and poverty; Kohlberg Kravis Roberts & Co. (KKR)

Press Release

Thousands of miles away from United States, thousands of workers toil away in sweatshops in the Guangdong province, making products for companies owned by US private equity giant Kohlberg Kravis Roberts & Co. (KKR).

 Clearly the recent economic crisis has influenced the American people’s lives, but I can only expect that the lives of Chinese workers who are employed under KKR-owned companies to be much worse , says Li Qiang, Executive Director of China Labor Watch (CLW). Li adds,  KKR’s growth relies on the cheap price of the products produced by companies under its wing .

In order to extend its growth, the private equity gave its suppliers low price to manufacture products while disregard how the suppliers produce the products. This strategy, however, is not sustainable; instead, it puts KKR’s investors at more risk. Paying suppliers at a low price does indeed give an immediate return; cheap products priced in the US market will encourage consumers to purchase more. However, low prices also create an incentive for suppliers to cheat on labor standards and on materials required to manufacture the product. If the product malfunctions or is tainted and harms the consumers in any way, it is not something low prices or discounts can convalesce.

As the economy worsens, I fear that KKR will request for even lower cost and demand much more productivity from workers than before, which will drive workers into deeper poverty, Li suggests.

The following subcontractors were researched as part of this project:

Dollar General

K-Mate factory

K-Mate is located in Zhongshan, and employs around 400 workers. It manufactures small electronics such as Bluetooth products, cell phone accessories, iPod accessories, etc. Workers reported that the chemicals seeped through their gloves and caused the skin on their hands to peel off. When workers requested face masks to avoid breathing in the fumes from some of the chemicals, their request was denied.
Images: www.youtube.com/watch?v=Pnnh9HHvmqg

Xingchan Plastic factory

Xingchan is located in Shenzhen and employs about 700-800 workers. It manufactures plastic products. Workers say the workshops are extremely hot and unsanitary. The floor is covered with grease and water.
Images: www.youtube.com/watch?v=dMU5BlZ9n2o

Debao Plastic factory

Debao is also located in Dongguan, and employs around 800 workers. It manufacturers commodities such as plastic utensils, wine bottle containers, notebooks, paper boxes, stickers, and handbags. At Debao, workers have to work at least 12 hours a day, seven days a week.
Images: www.youtube.com/watch?v=hk_NGaFkJB8

Daxing (Dongguan) Decoration factory:

This factory has roughly 1,800 workers and makes candles and Christmas lights. At Daxing, workers’ normal shift is eight hour a day, seven days a week.
Images: www.youtube.com/watch?v=YerBTrT7W_w

Masonite Doors

Stanley Hardware factory and Stanley Tools factory

Both of these factories are based in Zhongshan. Stanley manufactures bolts that are used in Masonite doors. Masonite is a KKR portfolio company. Workers are issued a meal card to use in the cafeteria. Workers who refuse to follow orders have anywhere from one to 14 meals deducted from their meal card.
Images: ww.youtube.com/watch?v=B2cZi4tzmZE

Tianrei Cement

Tianrei Corporation

A cement corporation owned by KKR in Henan Province. One-third of Tianrei’s workforce is temporary. These workers make only 600 yuan a month and are not entitled to any overtime pay or paid time off
Images: www.youtube.com/watch?v=1E71ux8edbI

China Labor Watch is calling on KKR to take immediate action to improve the conditions at these six factories and all of its Chinese suppliers. KKR must begin investing ethically to prevent unsustainable development and ensure its suppliers are obeying labor law and also pay its supplier factories reasonable prices so that low prices do not provide incentives for suppliers to cheat workers and materials used for production.

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Investment that creates workers’ misery and poverty; Kohlberg Kravis Roberts & Co. (KKR)

As the United States Presidential election draws conclusion, the world turns its eyes to the new U.S. president and his abilities to lead the nation away from all the existing obstacles that have been challenging the nation. But thousands of miles away from United States, thousands workers toil away in sweatshops in the Guangdong province, making products for companies owned by US private equity giant Kohlberg Kravis Roberts & Co. (KKR).

 Clearly the recent economic crisis has influenced the American people’s lives, but I can only expect that the lives of Chinese workers who are employed under KKR-owned companies to be much worse , says Li Qiang, Executive Director of China Labor Watch (CLW). Li adds,  KKR’s growth relies on the cheap price of the products produced by companies under its wing .

In order to extend its growth, the private equity gave its suppliers low price to manufacture products while disregard how the suppliers produce the products. This strategy, however, is not sustainable; instead, it puts KKR’s investors at more risk. Paying suppliers at a low price does indeed give an immediate return; cheap products priced in the US market will encourage consumers to purchase more. However, low prices also create an incentive for suppliers to cheat on labor standards and on materials required to manufacture the product. If the product malfunctions or is tainted and harms the consumers in any way, it is not something low prices or discounts can convalesce.

Working day in and day out, Chinese workers are well aware of the flaw the product they manufacture or what kind of harm the product could carry out. However, they could careless about the consequences these flawed products could bring. Who could blame them? They are constantly exploited and humiliated by employers that they no longer have the power to question the process of production.  As the economy worsens, I fear that KKR will request for even lower cost and demand much more productivity from workers than before, which will drive workers into deeper poverty , Li suggests.

Chinese factories and sweatshops have long drawn heavy fire for their deplorable working conditions and human rights abuses. Yet companies owned by KKR, one of the world’s largest private equity firms and the second largest employer in the US , contract with Chinese sweatshops in the Guangdong province where conditions are even worse than normal. A close survey of these Chinese factories with KKR connections reveals the repugnant working and living conditions that workers in these factories are forced to endure.

Problems with Chinese labor contractors/general issues

Chinese sweatshops are notorious for forcing workers to work long hours for little pay, under unhealthy and even dangerous conditions.

Chinese sweatshop workers often work 360-400 hours a month and more than 90 hours a week, almost twice the legal limit. A compliance manager for a major multinational company told BusinessWeek that he estimates that  only 20% of Chinese suppliers comply with wage rules, while just 5% obey hour limitations. 

KKR portfolio companies use problematic contractors

The private equity business model calls for its portfolio companies to maximize their profits through financial engineering as well as squeezing as much money as possible from the supply chain and other business operations, often to the great peril of workers.

For instance recently Nielsens, a KKR owned company laid off a great number of workers in the Tampa , Florida area and replaced them with Indian contactor TATA Consultancy. According to news reports the contracted workers received lower wages and benefits.

A number of KKR companies, including Dollar General, Masonite and Tianrei Cement have contracted out manufacturing of their products to Chinese factories. CLW was able to identify at least 6 factories that produced products directly for KKR subsidiaries. These may include products that would be sold as their own store brands or components for a larger product, such as bolts for doors. Piers data (A US import/export trade database) from January –March 2008 indicated that these factories had shipped product directly to KKR’s portfolio companies.

The following subcontractors were researched as part of this project:

Dollar General

K-Mate factory

K-Mate is located in Zhongshan, and employs around 400 workers. It manufactures small electronics such as Bluetooth products, cell phone accessories, iPod accessories, etc.

Xingchan Plastic factory

Xingchan is located in Shenzhen and employs about 700-800 workers. It manufactures plastic products.

Debao Plastic factory

Debao is also located in Dongguan, and employs around 800 workers. It manufacturers commodities such as plastic utensils, wine bottle containers, notebooks, paper boxes, stickers, and handbags.

Daxing (Dongguan) Decoration factory

This factory has roughly 1,800 workers and makes candles and Christmas lights.

Masonite Doors

Stanley Hardware factory< and Stanley Tools factory

Both of these factories are based in Zhongshan. Stanley manufactures bolts that are used in Masonite doors. Masonite is a KKR portfolio company.

1. Innovative for a Better World: Nike China 2008 Corporate Responsibility Reporting Supplement, Nike, page 20.

2. Dexter Roberts & Pete Engardio, Secrets, Lies, And SweatshopsBusinessWeek, 27 Nov 2006.

CLW investigated the conditions in these factories directly through the following methodology:

Methodology

May 22nd, 2008, CLW began a series of investigations on Chinese suppliers to companies owned by KOHLBERG KRAVIS ROBERTS & CO. (KKR). The investigations ended on July 11th, 2008. In the month of August, CLW launched a follow up investigation on the factories in order to obtain up-to-date data.

CLW began an initial research in identifying 33 possible Guangdong-based suppliers by internet and Piers.com and confirmed that 6 out of the 33 suppliers are hiring. CLW then sent investigators to work in six suppliers and simultaneously arrange researchers to conduct interviews with workers from the six suppliers. Hence, the findings were primarily based on investigators’ actual working experience in the factories and workers’ interviews.

The six suppliers ( Guangdong Province ) are:

Dollar General

Dongguan Daxing Decoration Ltd. (Daxing)

Images: http://www.youtube.com/watch?v=YerBTrT7W_w

Zhongshang K-Mate General Elec. Co., Ltd. (K-MATE)

Images http://www.youtube.com/watch?v=Pnnh9HHvmqg

Debao Corporation (Debao)

Images http://www.youtube.com/watch?v=hk_NGaFkJB8

Shenzhen Xingchang Plastic Product Ltd. (Xingchang)

Images http://www.youtube.com/watch?v=dMU5BlZ9n2o

Masonite

Stanley (Zhongshan) Tools Ltd. ( Stanley Tools)

Stanley (Zhongshan) Hardware Co. ( Stanley Hardware)

Images http://www.youtube.com/watch?v=B2cZi4tzmZE

Among the six factories, Daxing and Debao were acquired through internet research. Both factories’ websites stated that they have passed Dollar General’s audit requirements and became the company’s suppliers.

Through Piers.com’s data from January to March 2008, we were able to determine that Debao, Xingchang, Stanley Tools, Stanley Hardware have produced for companies owned by KKR. Piers.com is a website that maintains import and export information on cargos being transported both nationally and internationally.

CLW sent two investigators to investigate on two factories owned by Tianrei Corporation, a cement corporation owned by KKR in Henan Province.

The investigations at Tianrei were solely based on interviews with workers.

The Supplier ( Henan Province ):

Tianrei Corporation Ruzhou Cement Co., Ltd.

Antai Cement Co. Ltd.

Images http://www.youtube.com/watch?v=1E71ux8edbI

While interviews with workers at Tianrei Ruzhou Cement were conducted productively, at Antai, due to workers’ fear for their employer, CLW investigators were not able to obtain sufficient data except images of the factory’s exteriors.

During investigations on the factories, CLW was able to obtain workers’ pay stubs and contract, images of workshops, dormitories, products and etc. Workers’ living conditions were also filmed by the investigators.

The investigations were conducted from a neutral perspective which reflects the actual conditions behind suppliers to companies owned by KKR.

KKR portfolio companies’ Chinese contractors are problematic

CLW surveyed these seven Chinese factories that supply KKR portfolio companies. All of these contractor facilities were located in China ‘s manufacturing hub of Guangdong province. The factories all have onsite dormitories and cafeterias, where most workers eat and sleep.

The list of problems experienced by workers at these seven factories is long and shocking. Factories exploit workers, force them to work long hours for low wages, and at times, no wages. In some cases workers are not paid even the minimum wage and are not paid overtime as they are required to do under Chinese law. Furthermore, the factories make it difficult for workers to resign and illegally dock them up to a month’s wages for quitting. The factories also; impose arbitrary and onerous monetary penalties and subject workers to a dangerous work environment and squalid living conditions.

The private equity business model involves squeezing every last dime out of portfolio companies in order to turn a profit. But in China, this behavior has been taken to a new level. Furthermore, conditions at these particular facilities are terrible even by Chinese standards.

Poverty-level wages. Over half of the investigated factories that KKR companies contract with in the China paid poverty level wages equivalent to less than 70 cents an hour. In the provinces in which these factories are located, the legal minimum wage ranges from 750-850 yuan a month or roughly US$109-US$ 124 a month or 68-77 cents an hour.

While such low wages may be legal in China , an average worker in Guangdong province needs to earn between 1,300 and 1,500 yuan per month (US$189-$219) to have a sustainable living wage.

All of the KKR supplier factories make it impossible for its workers to earn a decent living and in some cases the factories violate the minimum wage laws. Most of the surveyed factories that KKR companies do business with pay below the living wage and some pay only the minimum wage. What’s worse is that some workers are paid& belowthe legal minimum. Furthermore, because of the long hours the factories require employees to work, the workers are not able to find a second job to supplement their incomes and bring them up to the living wage.

  • Debao Plastic factory, Dongguan: The average worker at Debao makes between 900 and 1,100 yuan per month (US$131-$160). There are also hourly workers at Debao, who are paid 25 yuan per day for their first three months of employment. This is 10 yuan below the minimum wage, which comes to 35.44 yuan per day (US$5).
  • K-Mate factory, Zhongshan: The average worker at K-Mate makes 800 yuan per month (US$117), just barely above the local minimum wage. During workers’ first month, however, their base pay if 690 yuan (US$101), below the local minimum wage.
  • Stanley Hardware factory, Zhongshan: Workers on the zinc production belt in Stanley Hardware’s electroplating department are paid 8-8.5 yuan per hour (roughly US$1), but all other workers are paid either 4.65 yuan or the minimum wage of 4.43 yuan per hour (roughly 65-68 US cents per hour).

Long hours & mandatory overtime. At six of the seven factories that KKR companies contract with, workers are forced to work very long hours and have mandatory overtime. Chinese labor law requires factories to pay overtime for any work in excess of eight hours a day or 40 hours a week, and workers may not legally work more than three hours of overtime in a single day or more than 36 hours of overtime per month. Furthermore, under the law, workers are entitled to one day off every week. However, in these factories contracted with KKR-owned companies these legal requirements are ignored.

In these factories, the exploitation is not just immoral, but it is illegal.

  • Daxing Decoration factory, Dongguan: Workers’ normal shift is eight hour a day, seven days a week, which is a violation of the law requiring at least one day off a week. In addition, t they are also required to put in five hours of overtime every weeknight, in excess of the legal limit. Workers refusing to work overtime have three days’ worth of wages deducted. During the peak season, workers only get two days off every month, and they are required to work 24-hour shifts at least twice a month. Furthermore, if workers fail to meet their daily quota four consecutive days, then on the fourth day, the factory starts deducting their overtime wages.
  • Debao Plastic factory, Dongguan: Workers have to work at least 12 hours a day, seven days a week, in excess of the legal limit. With overtime, they often put in 14 or more hours, and sometimes even work through the night. Furthermore, workers do not receive overtime pay for the work they put in on weekends.
  • K-Mate factory, Zhongshan: Workers are required to work overtime, but there is no set schedule for the overtime shift, so it can last all night long. Moreover, overtime pay does not kick in until a worker has put in 200 hours of work each month. This is violates the overtime laws, since based on an 8-hour workday, there are only 160-184 regular working hours in a month, depending on the month.
  • Stanley Hardware factory, Zhongshan: Workers start at either 7:30 or 8:30am depending on which department they are in, and during busy times are required to work overtime, which lasts until 10 or 11pm, in excess of the legal limit. If a worker refuses to work overtime, it is considered a no-show, and three no-shows result in termination. Furthermore, if workers in each department do not meet their daily quota, they are forced to work overtime for free until the quota is met.
  • Stanley Tools factory, Zhongshan: Overtime is mandatory at Stanley Tools, and workers are forced to put in two hours each night.

Fake contracts and pay stubs. Most of the factories require workers to sign a contract at the time they are hired that stipulates their hours, wages, and benefits, among other things. The factories use these documents as well as workers’ official pay stubs to demonstrate compliance with Chinese legal requirements and American companies’ labor standards. However, the official version of the contract and the official pay stubs are often just for show, and bear no resemblance to the conditions that the factory workers have to contend with. Factories that KKR companies contract with employed methods to evade the official contract.

  • Daxing Decoration factory, Dongguan: At Daxing, workers are not permitted to keep a copy of their contracts, so they have no way to hold their employers to the terms of the agreement. Furthermore, the factory makes them sign a fake, official pay stub, which shows inflated wages. They are later issued a real pay stub, which reflects their actual pay.
  • Debao Plastic factory, Dongguan: After signing a contract at Debao, workers are asked to place their fingerprints on a separate document that absolves Debao from any responsibility for honoring the terms of the original contract.
  • K-Mate factory, Zhongshan: Workers at K-Mate are not allowed to keep a copy of their contracts, so they are unable to hold the factory to the agreed-upon terms.

Barriers to quitting. At least five factories with which KKR companies contract make it difficult for workers to quit and find better opportunities elsewhere. Workers cannot simply quit, but rather have to file a request for resignation, which can take a long time to be approved. Typically, if a worker leaves before the request is approved, he/she has to forfeit the last month’s wages. Under local laws, workers are only required to give three days’ notice if they wish to quit, and under no circumstances is the employer allowed to withhold wages from the workers for work they have already done.

  • Daxing Decoration factory, Dongguan: Workers who have been employed at the factory for longer than six months typically have to wait over a month for the resignation request to be approved, or else must forfeit their last month’s wages. The factory sets a time at which the worker must vacate his/her dormitory and leave the premises, but the worker cannot collect wages for the last month of work until the end of that month.
  • Debao Plastic factory, Dongguan: The factory often takes up to two months to approve a resignation request, and workers who leave early have to forfeit the last month’s wages. Workers who have worked less than a month and want to resign often end up leaving without collecting any wages at all.
  • K-Mate factory, Zhongshan: It is extremely difficult for workers to quit, because the factory rejects nearly all resignation requests. When it does approve a request, it takes a long time to do so. Most workers who want to quit end up leaving before the request is granted and forfeit half a month’s wages. Furthermore, workers who quit before the termination of their contract with K-Mate have to pay a 100 yuan penalty when they resign, which is typically over 12% of their monthly wages.
  • Stanley Hardware factory, Zhongshan: Workers are required to give the factory 30 days’ notice before quitting, or else have to forfeit any wages they have not yet been paid.
  • Stanley Tools factory, Zhongshan: The factory only approves resignation requests if the worker gives at least one month’s notice. Workers who choose to leave earlier are not paid the full wages they are owed by the factory.

Onerous monetary penalties. Most of the factories that do business with KKR companies impose disproportionately high penalties and fines on workers, often for arbitrary reasons.

  • Daxing Decoration factory, Dongguan: Workers lose nine days’ worth of wages if they are caught smoking or drinking in their dormitories, if they are absent from work for more than half a day, or if they are uncooperative with security when they are being searched upon leaving the worksite. They lose three days’ worth of wages if they refuse to work overtime or are absent for half a day.
  • Debao Plastic factory, Dongguan: Workers are fined 10 yuan for having long hair, long nails, wearing sandals to work, or cutting in line at the cafeteria. They are fined 1 yuan for every minute they are late to work or every minute they leave work early. If they are 30 minutes late or leave 30 minutes early, they are penalized for missing half a day’s work, which costs them 50 yuan. If they miss a full day, they are fined 100 yuan, and if they miss three full days, they are terminated without receiving the wages they are due. On average, workers only make between 30 and 60 yuan a day, so these penalties can add up.
  • K-Mate factory, Zhongshan: Each month, the workers with the cleanest room in the dormitory are awarded 20 yuan each, and the workers with the dirtiest room are fined 20 yuan each. Workers who refuse to follow orders given by a supervisor are fined 50 yuan. Workers typically only make about 800 yuan a month.
  • Stanley Tools factory, Zhongshan: Workers are issued a meal card to use in the cafeteria. Workers who refuse to follow orders have anywhere from one to 14 meals deducted from their meal card.

Dangerous work environment. Factories that KKR companies contract with had dangerous working conditions, including health and safety violations, workplace injuries, and high temperatures on the factory floors.

  • Daxing Decoration factory, Dongguan: In April 2008, a worker’s leg was severely injured in a sewing machine accident. The worker was still hospitalized as of early July.
  • Debao Plastic factory, Dongguan: There are no air conditioners on the molding department floor, where temperatures can get very high. Many workers have fainted on the job due to the heat. Workers in the manual department who make paper boxes often cut their fingers, but Debao does not provide them with gloves. Some of the workers in the molding department who work with extremely hot objects are equipped with gloves, but many do not wear them because of a lack of training and awareness about workplace safety issues.
  • K-Mate factory, Zhongshan: Chemicals at the factory’s workshops are not labeled, so workers are not aware of the possible risks when handling these chemicals. Several workers reported that the chemicals seeped through their gloves and caused the skin on their hands to peel off. When workers requested face masks to avoid breathing in the fumes from some of the chemicals, their request was denied. Furthermore, some workers operate machines that give off radiation. Rather than being provided with the proper materials to keep them safe, these workers are merely paid an extra 100 yuan. Workers also say that the equipment in the workshops is not properly maintained, and that the door on the emergency exit is locked. Furthermore, workers complain that they do not receive adequate safety training and that the workshop floors are not air conditioned.
  • Stanley Hardware factory, Zhongshan: Although Stanley designates people to perform routine maintenance on factory equipment, workers say the machines are not properly maintained. This has resulted in several workplace injuries. Workers also complain about the high temperatures on the workshop floors.
  • Stanley Tools factory, Zhongshan: Workers report that the machines in the factory are not properly maintained. In December 2007, a worker’s left hand was sawed off in a workplace accident. Stanley concluded that the accident was caused by a lack of training in workplace safety and unsafe machinery. Stanley also does not supply workers with gloves because it believes that will slow down production. Workers therefore have to purchase their own gloves. Although the factory provides workers with aprons and masks, workers say it does so irregularly. Workers also complain that they are subject to extremely high temperatures.
  • Xingchan Plastic factory, Shenzhen: Workers say the workshops are extremely hot and unsanitary. The floor is covered with grease and water.

Squalid living conditions. Workers complained of deplorable living conditions in the dormitories and the factory cafeterias. Reminiscent of the factories towns in early 20th Century America , companies use the housing facilities as ways to deduct wages from workers for inedible food.

  • Daxing Decoration factory, Dongguan, a Dollar General Contractor
    Workers live in dormitories, with an average of ten people to a room. They are charged 160 yuan every month for food and housing, even if they choose not to eat in the factory cafeteria, where workers report that the conditions are unsanitary and the food is inedible. The bathrooms in the dormitories are extremely dirty, and lack running water, making it difficult to flush the toilets.
  • Debao Plastic factory, Dongguan
    Drinking water is only available on the first floor of the dormitory, meaning that workers on other floors must trek through the facilities to obtain clean water. Although workers pay a six yuan cleaning fee for their dorm room, it is still dirty and infested with cockroaches and mosquitoes. The shower lacks hot water and workers complain about the quality of the food in the cafeteria which costs them between 3-5 yuan for lunch and dinner.
  • Xingchan Plastic factory, Dongguan
    On average, six to eight workers share a dorm room at Xingchan. They pay 50 yuan per month, plus utilities. The ceiling fans in many of the dorm rooms are broken, but management does not fix them. The bathroom lights and doors are broken, but management does not fix them.

KKR’s Tianrei cement factory

Workers’ rights abuses and dangerous working conditions are problems not only with the Chinese factories that KKR companies use. Conditions at KKR’s own Tianrei cement factory are also poor.

Tianrei Group Cement Company is located in the Henan province in china. It employs 2,100 workers, and is one of China ‘s leading cement producers. KKR acquired Tianrei in 2007.

Part-time workforce. One-third of Tianrei’s workforce is temporary. These workers make only 600 yuan a month and are not entitled to any overtime pay or paid time off

Low wages. Full-time workers at Tianrei make between 950 and 1,200 yuan per month on average (US$138-$175). Part-time workers, however, make only 600 yuan per month (US$87) Workers at Tianrei have to sign their pay stubs, but are not able to keep a copy of the pay stub. Hence many workers do not know whether the factory is paying them the full wages.

Overtime violations. Not all workers at Tianrei get the regular overtime premium and Tianrei pays its overtime premium differently from what is legally required

Vacation and sick leave. As with the other factories, workers at Tianrei also sign a contract when they are hired. Even though the contract guarantees them paid vacation days, Tianrei does not abide by this agreement. Furthermore Tianrei does not offer workers paid sick leave. Only those who are injured on the job are allowed to take time off, but if they are out for more than 15 fays, then the supervisor who approved the leave is penalized. Part-time workers who are injured at work are not offered any time off and are forced to quit.

Workplace safety. Conditions at the Tianrei factory are dangerous and workers are put at risk. Tianrei only supplies its full-time workforce with safety equipment such as gloves, face masks, towels, soap, flash lights, and laundry detergent. Part-time workers are responsible for purchasing their own. Workers report that there is so much dust that they often cannot see clearly when they are operating machinery. Workers in the sintering sector work with a machine that preheats raw materials. When objects get stuck in the machine, workers are asked to clear the machine manually. This often results in severe burns, which can require two weeks’ recovery time. However, as mentioned above, workers who are injured on the job are only permitted to take up to 15 days off, so if it takes longer, they are out of luck. Furthermore, Tianrei sometimes penalizes workers who are injured on the job, which is illegal under labor law.

Fines and Penalties. Workers are fined 50-100 yuan for failing to maintain cleanliness in the workshop. If they make a mistake at work, they can be fined 50-200 yuan or even suspended, depending on the seriousness of the mistake. Finally, as mentioned above, Tianrei sometimes illegally penalizes workers who are injured at work.

For more detailed information, please download the PDF version of the 62-page report.

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