Foxconn, known previously as Hon Hai Precision Industry, is the largest contract electronics maker in the world and employs over one million people. Dispatch workers can be equated to temporary staff in the US.
"The investigation revealed that dispatch workers (temporary staff) made up more than 40% of the workforce, a clear violation of the legally mandated 10%".
The probe also found that the Hengyang workers were paid less than Foxconn workers in other Chinese cities - earning a monthly wage of 1,750 yuan ($273 US), while those at a Foxconn factory in Shenzen start at 2,400 ($375) yuan. The 94-page China Labor Watch report found that temp workers were not paid overtime, and unlike full-time workers did not receive sufficient safety training.
Foxconn says via an exchange filing it has begun its own internal investigation.
A statement released by the company said it was making a complete investigation of areas that were raised in the recent report and if they find the report to be correct, immediate actions will then be taken to bring any operations needed back into compliance.
It also found dispatch workers were employed at higher numbers than allowed.
As examples, the report said some workers were required to put in up to 100 hours of overtime per month when orders reach their peak.
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"We immediately requested a corrective action plan from Foxconn Hengyang detailing their plan to remediate the issues identified, and we are conducting regular assessments", Amazon said, adding that it was committed to ensuring that these issues were resolved. These workers often face 60-hour work weeks and are pushed to the point of exhaustion, reported The Guardian.
Amazon said the issues at the factory were discovered during an audit in March.
The report also claimed that the factory had poor fire safety in its dormitories, lack of sufficiently protective equipment, verbally abusive managers and the "absence of a functioning labor union". Amazon regularly assesses suppliers, using independent auditors as appropriate, to monitor continued compliance and improvement.
Amazon said it was aware of "two issues of concern" at the Foxconn factory earlier this year involving despatch workers and overtime pay, CNN reports. "If infractions are identified, we work to immediately rectify them", it said.