November 26, 2012, 1:04 AM — Samsung Electronics announced new measures to keep its suppliers in China compliant with labor laws after it completed a round of audits that found problems relating to overtime and the way penalties were carried out.
The South Korean company's on-site inspections examined 105 of its suppliers in China, in an investigation that covered more than 65,000 employees, it said in a statement on Monday.
The company came under scrutiny in August when a labor watchdog group alleged one of its suppliers in China had hired seven workers under the legal working age of 16.
Samsung said it found no underage workers in its recent audit. But the company did find "instances of inadequate practices at the facilities". These included overtime hours exceeding Chinese labor regulations and a system being used to impose fines for absences and tardiness by workers.
Samsung spokesman Campbell Graham declined to quantify the scale of the problems, but said the company had found evidence of the violations at "some" company suppliers.
Among the corrective measures Samsung is taking is to demand that its suppliers adopt a new hiring process immediately to screen out underage workers. This involves interviews of all candidates in person before hiring, and the use by suppliers of devices that can detect fake IDs, Samsung said.
By the end of this year, suppliers will also "correct irregularities in labor contracts," and make sure to distribute a copy to all employees, the company said in its statement. The penalty and fine system the suppliers were using has also been abolished, and Samsung is establishing hotlines so that workers can report labor violations to the company anonymously.
To reduce overtime work, Samsung said it had made the issue a "top priority," adding, "we are researching and developing measures that will eliminate hours beyond legal limits by the end of 2014." The company also said it would financially back its suppliers to invest more in equipment and to hire additional workers.
In addition to the on-site inspections, Samsung is also reviewing through documentation the rest of its 144 supplier companies in China. The review will be completed by the end of this year.
Labor protection group China Labor Watch, which reported finding underage workers at a Samsung supplier in August, however questioned the thoroughness of the company's investigation.