Iphone Factory ChinaSource: Apple

What you need to know

  • A new report from The Information claims Apple may have ignored breaches of labor law in China by its suppliers.
  • Specifically, it is alleged many Apple suppliers were using more temporary workers than permitted.

A new report from The Information claims that Apple may have ignored alleged breaches of labor laws by its suppliers in China regarding the use of temporary workers.

According to the report:

In 2014, Apple executives became alarmed when China enacted a new labor law meant to protect workers' rights. The law required that no more than 10% of a factory's workforce be temporary workers. Typically these employees have fewer benefits and legal protections than permanent ones, but Apple's suppliers increasingly relied on them in China's tightening labor market.

Apple surveyed 362 of its supplier factories in China that year and discovered that nearly half were over the quota for temporary workers. Eighty factories used temporary workers for more than half their labor force, according to an internal Apple presentation reviewed by The Information. Apple asked its suppliers to come up with plans to reduce their use of temporary workers by a March 2016 deadline, when a two-year grace period for the law expired. However, by the time the law went into effect, little progress had been made.

The report claims that an internal Apple presentation in 2015 noted that Apple's "surprised and delight" business model put massive pressure on suppliers, who couldn't cope with the spikes in demand without hiring swathes of temporary labor. The presentation reportedly noted Apple was "making it difficult" for Apple's suppliers to comply with the law.

According to the report, Apple did indeed ask suppliers to rectify the situation and make plans to reduce the use of temporary staff, but in a later presentation, it was noted that 81 out of 184 factories of Apple suppliers were over the 10% limit, suggesting little change.

According to two ex-employees cited by The Information, Apple made the decision to only press suppliers on the matter if local authorities kicked up a fuss. A presentation apparently suggested an approach that changed based on the risk and type of supplier, reducing the likelihood of business disruption.

In a statement to The Information, Apple said its supplier code of conduct was "the strongest in the industry" and applied equally to all of its supply chain partners. It further admitted that "occasionally" its suppliers used temporary labor and that it monitored this use closely "to ensure compliance with our code", working with suppliers on corrective action plans where issues were found.