Apple eradicating ‘bonded servitude’ at supplier factories


Apple has informed its supply chain partners that it will no longer tolerate the charging of recruitment fees to new hires, the company said in its annual Supplier Responsibility report on Wednesday. The practice is common in countries like China, where labor is in short supply, and manufacturers use third-party brokers to help staff their factories.

“It is in essence bonded servitude,” Apple’s Senior Vice President of Operations Jeff Williams tells Bloomberg, describing a scenario in which a factory new-hire is forced to take on a huge debt before they even begin work. “That fee needs to be paid by the supplier and Apple ultimately bears that fee when we pay the supplier and we’re OK doing that.” 

Previously, Apple had limited new-hire fees to one month’s pay. Any fee that was more than that was considered excessive and required suppliers to repay the amount when discovered. Apple says that suppliers have repaid almost $21 million in excess fees to more than 30,000 workers since 2008. “Every year we raise our standards,” Williams said.

Apple has taken quite a bit of criticism for the working conditions in its supply chain, with reports painting pictures of overworked and underpaid employees. But to its credit, the company has done a lot to remedy these issues—despite churning out a record number of iPhones in 2014, 92% of its supply partners met its work hour requirements.

Source: Bloomberg, Apple