Foxconn raises base wages, reduces overtime hours

Foxconn announced on Monday it is raising the base wages of its workers on the Chinese mainland by 16 to 25 percent as of Feb 1 and will reduce the number of extra hours they may work.

Liu Kun, Foxconn spokesman, said the rate of the pay raises will differ according to the job location and description and the workers' skills.

The base pay for a new assembly line worker in Shenzhen, for example, will increase from the current 1,550 yuan ($246) a month to 1,800 yuan, and after passing a six-month evaluation, that worker will earn a monthly base salary of 2,200 yuan instead of the current 2,000 yuan.

Liu said this is the third wage increase since the first of several Foxconn employee suicides - on Jan 23, 2010 - when the base pay of workers at the factory was 900 yuan.

"We are increasing the base pay to ensure that our workers' earnings will not drop much when their overtime hours are reduced. In this way, we hope to keep the good, qualified workers. Though the pay raises will definitely increase our costs, they will help save on recruitment expenses and lower the defect rate of our products."

He said the policy has been made known and already has taken effect with new Foxconn employees. The other workers will learn how much of a raise they are getting when they get their February salaries on March 10.

According to Liu, the raise was a decision made by Foxconn's trade union, the workers and the management at the end of December. It was the second year Foxconn adopted such a negotiation system on wages.

He said Foxconn will not permit employees to work more than 60 hours a week, or a total of 80 extra hours a month. The company will try to gradually lower the limit to a maximum of 36 extra hours a month, he said, and the company will increase its supervision of hours worked.

"Since we have more than 1 million employees, it is important to make sure the policies set at headquarters are observed by all groups. Workers can complain to the trade union through the hot line 78585."

Liu also responded to the Fair Labor Association's audit financed by Apple.

"It is an assessment and survey. It cannot be called an investigation and will also be conducted at all Apple's suppliers. It started with us because we are Apple's biggest supplier," he said.

Liu said he would like to see foreign media reports on Foxconn become more balanced and deeper. He said the New York Times did contact the company, but CNN and many other news organizations had not.

"There is no way we would intentionally use child labor. If individual cases actually occurred, they must have used fake identity cards and looked much older than they are."

In response to complaints about the nature of the work, Liu said that assembly lines are part of manufacturing:"To split a product into different parts on different production lines, there must be much of that type of work, and the work is dull."

He said each production line has dozens or even more than 100 workers, and discipline is necessary to ensure efficiency, but he denied that the company has a "military management" style.

A Foxconn employee named Tang, who since 2010 has worked in a computer assembly group in a plant in Guanlan county in Shenzhen, said she read about the pay increases in a newspaper.

She wasn't told she was getting a raise, but she expects to find more money in her pay on March 10.

Her base pay is about 2,400 yuan, and with the 20 yuan she earns for each overtime hour on weekdays and 27 yuan on weekends, she earns more than 3,000 yuan.

Tang said she normally works 10-hour days - eight standard hours plus two overtime.

"When it's busy, we have one day off a week, and when it's not busy, two days. Right now, after Spring Festival, it's not busy," she said with a bit of disappointment.

Tang said her work at Foxconn is "OK" and not "horrible" as she has seen reports in newspapers about working conditions at the company.

Zhang Shunnan, 21, who works in Foxconn's factory in Longhua county, the company's headquarters, said he has heard "rumors of raises". He considers the job he has had for two years to be "good". His basic wage is 2,000 yuan a month, but he gets more than 3,000 yuan through overtime.

A worker in Foxconn's iPad assembly group at the Longhua factory who gave his name as Huang told China Daily he came from Hubei province and was among workers recently interviewed by the Fair Labor Association.

"Each worker is given an iPad to do the interview; there are questions on it about whether you're satisfied with this or that," he said.

Huang described his work as "satisfactory" and that "it's better managed than at other factories, and the pay is higher". He had worked at Foxconn for about three years. He had left after a year to attend to family matters in his hometown and has been back for two years.

Huang's base pay is 2,390 yuan a month, but he said he normally gets more than 3,000 yuan. "In the busiest times, I earned more than 5,000 yuan, working 80 or 90 extra hours a month."

Auret van Heerden, president of the Fair Labor Association, told China Daily on Feb 16 that although the workers speak frankly about pay, food and their relationships with supervisors, they are not with regard to work hours.

"Very often, they won't tell you the hours they work; they're trying to earn extra money," he said.

Students and Scholars Against Corporate Misbehavior, a nonprofit organization in Hong Kong, said in a statement on Tuesday that even with the raise, Foxconn workers on the mainland still have meager salaries.

"Currently, inflation is high in China, and Foxconn's wage increase is just an adaption to the pay raise trend in China's electronic industry," the statement said.

It also said that a company as profitable as Apple should take responsibility to improve workers' pay and quality of life, and that the Fair Labor Association will not force its members to raise wages, so customers should keep putting pressure on Apple.

"For each iPhone sold, Apple gets 60 percent of the profit, while most of its suppliers gets only 1 percent, it will definitely leads to factory's exploitation on workers. Students and Scholars Against Corporate Misbehavior believes Apple shall give adequate resources and profit to its suppliers including Foxconn," said Cheng Yiyi, project officer of the organization.