Foxconn has long had a short-term internship program that we carry out in cooperation with local governments and vocational schools across China.  The average number of interns at any given time represents a very small percentage of our large workforce in China.  In addition to offering interns an industry-competitive salary, Foxconn also offers a range of benefits, including group insurance.

We are working with local governments and educational institutions to implement this program because it provides students, who are all of a legal working age, with the opportunity to gain practical work experience and on-the-job training in a number of areas that will support their efforts to find employment following their graduation.

We regularly carry out internal reviews of this program and a recent review of our operations in Hengyang determined that we were not in full compliance with all relevant laws and regulation.  In cooperation with the Foxconn Labor Union in that facility, we are working to address those areas where deficiencies have been noted. 

We can confirm that, effective immediately, the percentage of interns assigned to that facility will be brought into full compliance with the relevant labor law.  While the percentage of interns in that facility has fluctuated due to the schedules of incoming and outgoing program participants, there have been occasions when that percentage has exceeded permitted levels and we are taking action to ensure that this does not happen again.

In addition, we have doubled the oversight and monitoring of the internship program with each relevant partner school to ensure that, under no circumstances, will interns are allowed to work overtime or nights.  There have been instances in the past where lax oversight on the part of the local management team has allowed this to happen and, while the impacted interns were paid the additional wages associated with these shifts, this is not acceptable and we have taken immediate steps to ensure it will not be repeated.

We can also confirm that we are stepping up recruitment of full-time workers to reduce levels of dispatch workers in that facility.  While the use of dispatch workers in that facility is in compliance on a full-year basis, there have been periods during peak production season when the number has exceeded permitted levels and we are working with management to increase levels of full-time staff to reduce the use of these workers during all periods of the year.

While the wages paid all employees in the Hengyang facility are in compliance with the relevant laws and regulations and they exceed mandated wage levels for each position, we continuously strive to offer the most competitive salaries in our industry in each location where we operate.  In line with this, we are carrying out a full review of all salaries and benefits for all staff in the Hengyang facility and will make any adjustments required to support our active employee recruitment efforts and to ensure our continued industry leadership in that location.

While we work hard to comply with all relevant laws and regulations in the implementation of this program, if we are alerted to any possible violations, as was the case with the situation in Hengyang, we carry out a full investigation and then we work equally hard to take action to correct them if they are confirmed.  The actions outlined above are being carried out immediately and we will continue to closely monitor the situation and we will not hesitate to take any additional steps that might be required to meet the high standards we set for our operations.