Apple suspends business with its second-largest iPhone manufacturer, Pegatron, after discovering student labor violations in China

• Apple said Monday it has halted business with supplier Pegatron after discovering labor violations at a student workers' program.
• Pegatron, the second-largest iPhone manufacturer, misclassified students, allowed them to work night shifts and overtime, and let them perform work "unrelated to their major," Apple said.
• An Apple spokesperson said: "Apple has placed Pegatron on probation and Pegatron will not receive any new business from Apple until they complete all of the corrective actions required."
• This isn't the first time Apple has faced supply chain trouble — in September 2019, it emerged that Apple and Foxconn, its biggest supplier, broke Chinese labor laws by employing too many temporary workers.

Apple announced Monday it had suspended business with its second-largest iPhone supplier, Pegatron, following labor violations on the manufacturer's student workers program.

The tech giant said that, several weeks ago, it discovered the Taiwanese manufacturer "misclassified" student workers and let them perform work "unrelated to their major" at its plant near Shanghai.

Apple said the company also allowed students to work night shifts and overtime, which violates Apple's Supplier Code of Conduct.

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The news was first reported by The New York Times.

"Apple has placed Pegatron on probation and Pegatron will not receive any new business from Apple until they complete all of the corrective actions required," an Apple spokesperson said.

Apple said Pegatron falsified paperwork to hide the labor violations. "The individuals at Pegatron responsible for the violations went to extraordinary lengths to evade our oversight mechanisms," the spokesperson said.

Apple found no evidence of underage or forced labor, they added.

Pegatron has now fired the executive of the student program, and students have safely returned to their homes with financial compensation, Apple said.

Pegatron did not immediately respond to a request for comment.

Apple relies on companies such as Pegatron, and larger Taiwanese rival Foxconn, to assemble its products, such as the iPhone.

Apple has run into trouble with Foxconn, too.

In September 2019, a report published by China Labor Watch found that the US tech company and Foxconn broke Chinese labor laws by employing too many temporary workers at the world's largest iPhone factory in Zhengzhou.

Undercover investigators discovered that 50% of the factory's workforce was made up of temporary workers, even though Chinese law caps the proportion of temporary workers at 10%.

In October, Apple unveiled its latest lineup of new phones. The iPhone 12 and iPhone 12 Pro are available to buy now, while the iPhone 12 Mini and iPhone 12 Pro Max are available to preorder as of November 6, and will ship on November 13.