Apple Inc. (AAPL): Labor Conditions Questions Arise At Suppliers’ Factories


Apple Inc. (NASDAQ:AAPL) is increasingly coming under labor spotlight ahead of the launch of its fresh version of smartphone, iPhone 6. The launch is expected early next month. The share price of Apple stock has been on the rise, up more than 0.91% in the early morning session today, as investors keep betting on the prospects of the iPhone 6. The device is expected to boost Apple’s revenue, besides supporting its penetration of markets such as China. However, a recent labor report by brought to the fore some flaws that Apple may not be very comfortable with, especially as it prepares for iPhone 6 launch.

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The Fair Labor Association – FLA, looked into the workplace practices of one of Apple’s manufacturers with operations in Shanghai and Changshu. The workplace assessment revealed a number of uncomfortable truths about labor law violations. However, Apple Inc. (NASDAQ:AAPL) appears ready to not only talk about these issues, but also to work towards solving them. As a matter of fact, Apple has been trying to get its suppliers to uphold higher workplace standards for the sake of its reputation and workers’ wellbeing.

According to the FLA report, the situation in the Apple’s production line was not entirely warning, but some issues stood out that needed speedy remediation to ensure full compliance with workplace environment code, especially as considered by the FLA.

Some of the issues that were found in the Apple Inc. (NASDAQ:AAPL) production line at Quanta’s factories included recruitment policies, compensation and work hours among many others. Once again, the FLA reported cited that the situation in the factories examined was not dire. Nonetheless, the questions that arose, such as hiring policies have the potential of damaging the business image and revenue.

For example, as concerns recruitment policies, it was found that most workers at Quanta’s factories were hired from agencies that took hiring fees from the workers. The FLA, however, noted that the hiring agency is permitted to take fees in certain situations, but even so there should be a way to distinguish dispatch workers from the regular employees.

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