Apple Inc. has placed its Taiwanese manufacturing partner Pegatron Corp. on probation after discovering labor violations, and has said that it will not give them any business until a corrective action is completed, according to a report by Bloomberg.
Pegatron is one of just a handful of partners Apple relies on globally to assemble marquee products such as the iPhone.
Employees are also said to have lived in substandard dormitories, as well as working significantly longer hours than was claimed. Some of these tactics involved falsifying paperwork and deliberately misclassifying students who are a part of the work-study program.
Apple iPhone assembler Pegatron will reportedly receive no new business from the Cupertino company until it takes action to prevent student labor violations. Pegatron "went to extraordinary lengths" to cover this up, Apple said.
A 2012 audit of Foxconn commissioned by Apple alleged that workplace accidents may be common and that some workers considered their overtime pay insufficient.
Shares of the Taipei-based electronics company fell swiftly in late Monday trading. The contract manufacturer said that the violations occurred at its campuses in Shanghai and Kunshan and that students working overtime, night shifts and in positions not related to their major were "not in compliance with local rules and regulations".
"Pegatron's current iPhone business should not be affected".
In 2014, a BBC investigation found that conditions at a Pegatron production line for the iPhone 6 frequently violated Apple's promises to protect workers.
The US technology giant had said that Pegatron had mis-classified student workers and falsified paperwork to disguise the violations.
Apple spent years upbraiding manufacturers after a rash of suicides at main partner Foxconn in 2010 provoked outrage over the harsh working environments in which its upscale gadgets were made.
"Upon detection of this inconsistency, we immediately withdrew student workers from production taxes and provided all necessary support with our client and third-party experts to make the appropriate arrangements for their return to their homes or schools".
It said it has taken "quick action" to strengthen its procedures, and will adherence to the code of conduct to metrics used to evaluate senior management.