Amazon may be one of the biggest companies in the world but its unethical business practices has attracted criticism on multiple occasions in the past.
The e-commerce giant is making headlines once again for its alleged mistreatment of Chinese factory workers who were hired illegally for the manufacture of Echo smart speakers and Kindle e-readers. After an astonishing report from a labor advocacy group about the poor working conditions in Amazon factories, the company is now under investigation to verify the allegations.
Investigation Reveals Shocking Details
E-commerce giant Amazon has finally admitted that it illegally hired and underpaid thousands of agency workers in China for the production of its kindle e-readers and Echo smart speakers. After an investigation into the working conditions in Foxconn factory in Hengyang, China, Observer and China Labor Watch – a labor advocacy firm – revealed Amazon’s secret unethical practices in an eye-opening report.
The company issued a statement following the allegations, expressing regret for the ‘issues of concern’ and said that it had sent auditors to the factory last month only to discover that the agency had hired thousands of workers illegally. Moreover, the employees were seriously underpaid and had to work overtime in order to make ends meet.
Agency workers, who are also known as the dispatch staff in China, are not allowed to take holidays or sick leave and are often fired or laid off without adequate remuneration during off-peak production season. According to a change in Chinese labor laws in 2014, companies are not allowed to use more than 10% of the dispatch workers simply due to the labor exploitation that had occurred in the past.
Underpaid and Overworked
Despite the law, China Labor Watch found through its investigation that almost half of the staff in Foxconn factory were dispatch workers being paid the minimum hourly rate instead of the time-and-a-half specified in Amazon’s code of conduct as well as required by Chinese law.
Amazon claimed in its statement that it takes the supplier code of conduct very seriously and any violators will be thoroughly investigated and held accountable for their actions. After the March audit, the e-commerce company requested immediate corrective action from Foxconn Hengyang to resolve the sensitive issue. The Chinese agency is being monitored regularly to ensure that it is complying with Amazon’s supplier code of conduct.
The workers in Hengyang factory were also paid significantly less than those working for Foxconn in other Chinese cities. For example, the Shenzhen factory which manufactures for Apple offers its workers a basic monthly salary of 2,400 yuan whereas the Hengyang workers only made 1,750 yuan per month. The investigation also showed payslips as proof of labor abuse in the Foxconn factory.
Most of the staff was working up to 80 hours of overtime every month, even though the maximum limit under the Chinese law is just 36 hours. The employees were only allowed a few of bathroom breaks during the day and would often require permission from their supervisor before going to the toilet.
First Investigation Against Amazon
Investigators from the China Labor Watch disguised themselves as dispatch workers and spent almost a month working in Foxconn’s Hengyang to gain first-hand knowledge on Amazon’s unethical business practices. The executive director of the Labor Watch wrote a letter to Jeff Bezos, the CEO of Amazon, asking him to end the company’s relationship with Foxconn and encourage its suppliers to improve factory and warehouse working conditions.
Although Amazon has faced intense criticism in the past over the inhumane treatment of its warehouse workers, this is the first time the company is being investigated for breaking the labor laws. Both Foxconn and Amazon – whose CEOs have accumulated billions of dollars in net worth – now face the heat from federal investigators as well as labor advocates. Labor Watch says that Amazon only cares about its suppliers fulfilling orders on time and pay very little attention to the working conditions in factories in other parts of the world.
Terry Gou, the CEO of Foxconn is worth $8 billion whereas Amazon’s Jeff Bezos is one of the richest men in the world with a net worth of $100 billion. Meanwhile the factory employees working for these billionaires are making a little over $1 per hour.
Do you think lawmakers should take stricter action against multi-billion-dollar companies like Amazon for exploitation of human labor?