Amazon shares ended in the red in the US Friday and are now poised to open lower Monday, following a report criticising the working conditions of staff at a Foxconn factory in China that produces a number of Amazon tech goods.
It is worth remembering that Foxconn is the world's largest contract electronics manufacturer and employs more than a million people, spread across multiple factories in the Far East and beyond. Dispatch workers can be equated to temporary staff in the US.
Foxconn's facility in Hengyang, which makes Amazon products, has been accused of poor working conditions.
While factories are required by Chinese laws to limit dispatch workers to 10% of the staff, the Foxconn plant had 40%.
These workers are claimed to receive just eight hours of training, to a permanent worker's five days, pay fees for mandatory physical examinations, do not receive paid sick leave, and are not scheduled to work - and thus not paid - when the factory is in its off season. The 94-page China Labor Watch report found that temp workers were not paid overtime, and unlike full-time workers did not receive sufficient safety training.
Dispatch workers earned 14.5 yuan (US$2.26) per hour, the report said.
Foxconn says via an exchange filing it has begun its own internal investigation.
"Amazon takes reported violations of our Supplier Code of Conduct extremely seriously".
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According to the CLW report, its employees continue to be subject to a grueling 100 hours of monthly overtime, which should have been no more than 36 hours. The concerns involved treatment of dispatch workers and overtime pay, Amazon spokesman Ty Rogers said.
Now that reporting on Apple doesn't get the global attention it once did, China Labor Watch has turned its attention to poor working conditions at a Foxconn plant that makes Echo speaker and Kindle tablets for Amazon.
The watchdog group China Labor Watch, based out of NY, released a study over the weekend relating the conditions under which workers in the factory function.
"We immediately requested a corrective action plan from Foxconn", stated Amazon to Reuters. "Amazon's profits have come at the expense of workers who labor in appalling working conditions and have no choice but to work excessive overtime hours to sustain a livelihood".
In response to the report, Amazon said it audited the factory in March and found overtime and use of dispatch workers were "issues of concern".
In its statement, Foxconn said salary reviews "are conducted regularly and we ensure that we offer all employees remuneration that exceeds statutory requirements and that is competitive with our industry peers".
In a statement to the media, Amazon said it conducts internal audits of supplier factory conditions. "If infractions are identified, we work to immediately rectify them", it said.