China: Factory Fully Pays Some Student Workers

Friday, January 13, 2017
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By Mark Melnicoe

Jan. 13—Exploitation of student workers by large manufacturing concerns in China is being addressed by at least one employer.

The Cuori appliance factory in eastern China is paying back wages to 88 student workers employed last summer and reimbursing them for various deposits not returned by labor agencies.

The students worked 12- to 15-hour days under sweltering conditions last July and August in Cuori's factory in Ningbo, Zhejiang Province, and were not paid the amounts promised for overtime. The labor agencies that recruited them also deducted portions of salaries for dubious reasons and withheld deposits the students had paid for things such as entry into their squalid dormitory.

China Labor Watch, a New York-based advocacy group for Chinese workers, investigated Cuori after it received complaints from students in October. It issued a scathing report Dec. 1, saying the factory “exploited laborers working under extremely stressful and exhausting conditions.”

The Cuori factory manufactures sandwich makers, waffle irons, heaters and other small appliances under its own label and for such brands as Hamilton Beach, Cuisinart and George Foreman. The products are sold by Walmart, Home Depot, Target and other American retailers.

‘It's a Big Issue'

With 8,000 employees, Cuori is among the largest of China's small appliance exporters. The factory, as is often the case, contracts with labor agencies to recruit university students to come to work in the summer months. The labor agencies are notorious for stiffing student workers on pay, making false promises on working conditions and imposing fees and deposits they claim they will pay back when the employment ends.

Labor authorities in Ningbo, which lies on Hangzhou Bay south of Shanghai, told Cuori officials in October that they would have to make good on the full salaries if the labor agencies continued to refuse to pay students all they were owed, Wang Hongfa, chief of labor security at the Ningbo Hangzhou Bay New Zone Human Resource and Social Security Bureau, told Bloomberg BNA in a phone interview Jan. 5.

“This case happened in the area that I'm in charge and happened to students,” Wang said. “It's a big issue.”

Wang said the agency Cuori hired to recruit the students—Ningbo Anzhi Labor Dispatch Company—was working illegally because it was not registered in the Hangzhou Bay New Zone.

“So I told Cuori to pay the students,” Wang said.

“By the end of October, Cuori had paid off salaries to the students and provided me with checking lists and proofs,” Wang said.

Outside Pressure

In an e-mail to Bloomberg BNA Jan. 6, Li Qiang, executive director of China Labor Watch, said: “We have the confirmation from 88 students receiving their wages at the rightful rate from Cuori factory. But there are still a large number of students who have not yet received their due wages. Unfortunately, we don't have contact information of these students.”

CLW contacted retailers including Walmart and Home Depot, Li said, “requesting them to help urge the Cuori factory to reach out to all students who have worked there and return their wages as soon as possible, as these violations of labor rights are against their conduct codes.”

Li also said that outside pressure—from the news media and retailers—pushed the factory into paying up.

“On Dec. 8 Home Depot visited our office and we had a meeting,” Li said in a Jan. 5 e-mail. “During the meeting, they asked if it's better for them to terminate the cooperation with the Cuori factory. So I believe the Cuori factory's customers such as Walmart, Home Depot and Target certainly brought some pressure on expediting the payment return.”

“Following our news release on this matter on Dec. 1, Voice of America and Radio Free Asia, along with some other Chinese media, have all done follow-ups of the story,” Li said. “The factory then attempted to negotiate with some of the students about paying back the wages.”

In a Dec. 23 e-mail to Li, Target said, “We take these allegations very seriously as they would constitute a violation of our Standards of Vendor Engagement.”

“We expect all vendors supplying Target product to preclude excessive hours, forced labor, and maintain a safe and healthy workplace,” wrote Target executive Ivanka Mamic.

‘Forced Labor'

Li, who is a lawyer, issued a new charge that wasn't included in CLW's Dec. 1 report.

“I've written to some brands to further explain the severity of this issue,” he told Bloomberg BNA. “I've mentioned that what the Cuori factory did, illegally holding students' ID card to prevent them from leaving, pertained to forced labor, which is a grave charge. I've also discussed this issue with U.S. Department of Labor.”

One of the labor agents who recruited and hired students, Yu Xiaochuan, blamed his own agency, which he said withheld funds the factory had paid. Yu told Bloomberg BNA in an online chat Jan. 4 that he had quit his job over the incident after asking a friend to report the case to local labor authorities in Ningbo.

The students are simply grateful to finally get the remaining pay they were owed.

“Many times we were full of hope, and finally we felt down,” Li Wanli, one of the affected students, told Bloomberg BNA in an online chat Jan. 5. “Now I've been reissued 3,293 yuan ($477). I'm really excited. We really appreciate it.”

To contact the reporter on this story: Mark Melnicoe in Shanghai

To contact the editor responsible for this story: Rick Vollmar

For More Information

China's Labor Law is available in English here, the China Labor Watch report here.

For more information on Chinese HR law and regulation, see the China primer.

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