Foxconn, Samsung face dilemma with plan to cut overtime at Chinese factories

Foxconn, Samsung face dilemma with plan to cut overtime at Chinese factories

IDG News Service - Assembly line workers are logging 12-hour days to churn out the latest handsets for Samsung Electronics at a factory in Huizhou, China.

24-year-old Wang Hong Wei knows what it's like: He and about four to six others would collectively assemble 2,700 Samsung Galaxy S III phones each day at the factory run by HTNS Shenzhen Co. But they could never finish the job within normal working hours.

"They told us we could complete it in ten hours, but ten hours was not enough," Wang said when interviewed in late November. "Every day we kept working, but we couldn't finish."

Long working hours are often cited as one of the major labor law violations occurring at electronic manufacturers in China. But for many workers in the country, the excessive overtime is simply the norm, and even sought after. In exchange, employees receive higher salaries, and companies such as Samsung and Apple supplier Foxconn can ship out more product. But after facing increased scrutiny over working conditions in China, both Samsung and Foxconn have pledged to bring down workers' overtime hours over the next two years.

By July 2013, Foxconn plans to limit the overtime at its factories to the Chinese legal limit of 36 hours per month. Samsung also plans to do the same by the end of 2014 for its supplier factories in the country.

But meeting the goal will mean overcoming serious challenges, which if mishandled could lower the salaries for workers, many of whom are dependent on the extra wages to make a living.

"It will definitely be bad for us if they cut overtime," said Li Xiaoan, a Foxconn worker. "Then our money will be less."

At the Foxconn factory in Zhengzhou, China, workers are assembling Apple's iPhone 5. But already, employees such as Li said on Tuesday that demand for overtime hours at the factory has dried up.

"It's the low season," he said, referring to how demand for shipments of the iPhone 5 has fallen. Now Li works only eight hours a day, and occasionally sees overtime hours and every now and then. During the next few months, he expects his monthly wage will be around 2000 yuan (US$318), a little above the 1800 yuan base wage.

"When I first came here, I was making 3200 yuan, and working 10 hours each day, including two hours overtime," he said.

Labor protection groups are also aware that many workers want to keep their overtime, even as the groups have continually criticized Foxconn and Samsung for the long working hours. "I remember one worker told me, don't report on the overtime. If you talk about overtime, the companies will cut it," said Li Qiang, the founder of New York-based China Labor Watch.