The nearly month-long investigation found excessive overtime and problems with overtime compensation; several health and safety risks; and crucial communication gaps that have led to a widespread sense of unsafe working conditions among workers.
However, Fair Labor Association added that it had secured commitments that would reduce working hours to legal limits while protecting pay, improve health and safety conditions, establish a genuine voice for workers, and would monitor on an ongoing basis to verify compliance.
"The Fair Labor Association gave Apple?s largest supplier the equivalent of a full-body scan through 3,000 staff hours investigating three of its factories and surveying more than 35,000 workers. Apple and its supplier Foxconn have agreed to our prescriptions, and we will verify progress and report publicly," said Auret van Heerden, President and CEO of the Fair Labor Association.
FLA's investigation found that within the last 12 months, all three factories exceeded both the FLA Code standard of 60 hours per week (regular plus overtime) and the Chinese legal limits of 40 hours per week and 36 hours maximum overtime per month. During peak production periods, the average number of hours worked per week exceeded 60 hours per worker. There were periods in which some employees worked more than seven days in a row without the required 24 hours off.
Foxconn has committed to bring its factories into full compliance with Chinese legal limits and FLA standards on working hours by July 2013, according to its remediation plan in FLA's report.
More importantly, while employees will work fewer hours, Foxconn has agreed to develop a compensation package that protects workers from losing income due to reduced overtime. In order to maintain capacity while reducing workers? hours, Foxconn committed to increase its workforce significantly as it builds additional housing and canteen capacity.
FLA also discovered that 14 percent of workers may not receive fair compensation for unscheduled overtime. The assessment found that unscheduled overtime was only paid in 30-minute increments. In addition, FLA secured agreement from Foxconn and Apple to retroactively pay any worker due unpaid overtime. The companies are currently conducting an audit to determine the payments due to workers.
According to FLA's worker survey, 64 percent of employees say that compensation does not meet their basic needs. FLA will conduct a cost of living study in Shenzhen and Chengdu to assist Foxconn in determining whether worker salaries meet FLA requirements for basic needs, as well as discretionary income.
FLA observed other serious issues in areas such as health and safety, worker integration and communication, treatment of interns, and China's social security enrollment, among others.
Until now, Foxconn only recorded accidents that resulted in a production stoppage. Beginning immediately, Foxconn committed to require supervisors and workers to report all accidents resulting in an injury.
The assessment also found that the union at Foxconn is dominated by management representatives and does not provide true worker representation. In keeping with local laws, Foxconn has agreed to ensure elections of worker representatives without management interference.
FLA also secured agreement by Foxconn to find alternative ways to address low enrollment in social security benefit programs and to adapt its internship program to ensure that interns enjoy the protections necessary for a productive, healthy and safe educational experience.
"If implemented, these commitments will significantly improve the lives of more than 1.2 million Foxconn employees and set a new standard for Chinese factories," van Heerden said.
Apple CEO Tim Cook visited a Foxconn factory in Zhengzhou, China, on Wednesday.
A full copy of the report is available at www.fairlabor.org/transparency/complaints-investigations.