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Foxconn, Samsung face dilemma with plan to cut overtime at Chinese factories

By Michael Kan
December 24, 2012 09:05 AM ET

But Li Qiang and others argue that the more serious problem is that workers' base wages are so low, they have no choice but to work long hours.

"It's not enough to live off of, so they have to do the overtime," Li Qiang said. "If Foxconn raised the base wages, and workers still did the overtime, then that would be a better alternative. Some workers may want the overtime, but others could choose to do something else, and have a life."

Foxconn appears to be aware of the dilemma, and is expected to raise workers' wages to mitigate the effects of the reduced overtime. Already the company is working on a "compensation package" to protect workers' pay, according to the Fair Labor Association, which has been auditing the factories for labor law violations.

Samsung is also researching measures to eliminate excessive overtime, but declined to offer details.

Despite the two companies' pledges, labor experts said they were skeptical Foxconn and Samsung will be able to fully reduce the overtime at their factories.

Not only do the factories have to take action, but so do vendors such as Apple, said Kalen Hua, a coordinator with the China Labor Research Center. To help bring down demand for overtime, Apple will have to give the factories a longer window to complete shipment orders, he added.

But another problem is that many workers tend to leave the factories in search for other jobs once the low season arrives. Often times this can exacerbate overtime hours for the remaining workers when shipments ramp up again.

"I don't know if they can guarantee that they will come through on this, but if they do succeed, then Foxconn and Samsung will be the first ," Hua said. "If they can take the lead on this, then they could influence other companies. Workers would also want to stay at Foxconn and Samsung."

Some hope to see changes soon.

"They should really think about the workers, and not just about the supply," said Wang Hong Wei, who left the Samsung supplier in Huizhou after only working at the factory for five days. Among his complaints were the exhausting work, the disrespect from management, unpaid wages, and the need to stand all day.

"It felt like the management there was almost inhumane," he said. "I hope the conditions get better for the workers who haven't left."

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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