Apple Suspends Supplier Following Labor Violations | Financial Buzz

Apple Suspends Supplier Following Labor Violations

Apple (NASDAQ: AAPL) announced Monday that it has halted operations with one of its suppliers, that assembled products such as iPhones and iPads, after it violated the company’s labor code.

“Several weeks ago, we discovered Pegatron — one of Apple’s suppliers in China — violated Apple’s Supplier Code of Conduct in its administration of a student work study program,” an Apple spokesperson told CNBC. 

The technology company said it would not be giving Pegatron any incoming business following news they falsified paperwork so that students could work nights and overtime. Additionally, Pegatron sometimes had students working on tasks that did not pertain to their major, according to apple. The company assured that the students were reimbursed for their work and sent back home to finish their studies.

Pegatron is currently building the iphone 12 mini and the events do not affect existing business. However, it is unknown how many contracts Apple has with the supplier or how long those existing commitments may last. Apple has declined to comment on the matter.

“The individuals at Pegatron responsible for the violations went to extraordinary lengths to evade our oversight mechanisms,” Apple said in a statement. “Pegatron misclassified the student workers in their program and falsified paperwork to disguise violations of our code.”

Apple will not be giving Pegatron new business until it repairs all malfunctions that led to the violations. Furthermore it said that it had found no evidence of forced or underage activity. The Pegatron executive in charge of the program has since been fired.

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