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Apple's China workers get a raise, fewer work hours on auditor's report

Apple's China workers get a raise, fewer work hours on auditor's report

The Fair Labor Association (FLA) says Taiwanese company Foxconn, which runs Apple's factories in China, is committing to a reduction of weekly work time to 49 hours.

Apple CEO Tim Cook (C) during a recent visit to the iPhone production line at Foxconn Zhengzhou Technology Park, which employs 120,000 people. PHOTO: AP Apple CEO Tim Cook (C) during a recent visit to the iPhone production line at Foxconn Zhengzhou Technology Park, which employs 120,000 people. PHOTO: AP
Apple Inc's China workers, who often spend more than 60 hours per week assembling iPhones and iPads, will have their overtime hours curbed and their pay increased. The technology giant had hired a labor auditor to inspect its factories.

The Fair Labor Association (FLA) says Taiwanese company Foxconn, which runs Apple's factories in China, is committing to a reduction of weekly work time to 49 hours - the legal Chinese maximum.

That limit is routinely ignored in factories throughout China.

FLA CEO Auret van Heerden said Foxconn is the first Chinese company to commit to following the legal standard. Apple's and FLA's own guidelines call for work weeks of 60 hours or less.

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Foxconn's moves are likely to have an impact across the global technology industry. The company employs 1.2 million workers in China to assemble products for Apple, Microsoft Corp, Hewlett-Packard Co and other pillars of US technology.

Foxconn's factories are the last step in the process of manufacturing iPhones and other Apple devices, most of which have hundreds of components.

Research firm IHS iSuppli estimates that Apple pays $8 for the assembly of a 16-gigabyte iPhone 4S and $188 for its components. It sells the phone wholesale for about $600 to phone companies, which then subsidise it to be able to sell it for $200 with a two-year service contract.

The FLA auditors visited three Foxconn complexes in February and March: Guanlan and Longhua near the coastal manufacturing hub of Shenzhen, and Chengdu in the inland province of Sichuan. They employ a total of 178,000 workers, with an average age of 23.

Average monthly salaries at the factories ranged from $360 to $455. Foxconn recently raised salaries by up to 25 per cent in the second major salary hike in less than two years.

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Apple's enormous profits - $13 billion in October-to-December quarter - have made it the world's most valuable company, worth more than $570 billion. It's also put the spotlight on the way its products are made.

The FLA in its report said it didn't find instances of child or forced labor.

Apple has kept a close watch on its suppliers for years and in January took the further step of joining the FLA. The organisation has audited overseas suppliers for clothing manufacturers, but Apple was the first electronics company to join. It also commissioned the FLA to produce a special audit of Foxconn's factories.

Apple CEO Tim Cook visited a Foxconn factory in Zhengzhou, China, on Wednesday.

Labour unions have criticised Apple's use of the FLA, insisting that audits are a "top-down" approach. Foxconn's workers would be better served, they believe, by being able to organise.

"The report will include new promises by Apple that stand to be just as empty as the ones made over the past 5 years," said SumOfUS.org, a coalition of trade unions and consumer groups, ahead of the release of the report.

The FLA found few safety violations, noting that the company had already dealt with problems like blocked fire exits and defective protective gear. It's also taken step to reduce the amount of aluminum dust in the air, after the metal created an explosion at a Foxconn factory in Chengdu last year, killing four workers.

The auditors examined one years' worth of payroll and time records at each factory, conducted interviews with some workers and had 35,000 of them fill out anonymous surveys.

Apple has started tracking the working hours of half a million workers in its supply chain, and said that 89 per cent of them worked 60 hours or less in February, even though the company was ramping up production of the new iPad. Workers averaged 48 hours per week.