Foxconn unit faces housing probe

Worker funds not paid, says paper

Raymond Li
Updated on Jun 05, 2010

A Foxconn subsidiary in Yantai, Shandong, is under investigation for failing to contribute to mandatory housing funds on behalf of 80,000 workers at the Foxconn Science and Technology Park.

A spokesman for the Yantai Economic Technology Development Zone’s Bureau of Finance, which oversees the matter, said the investigation was in response to a report by the Economic Information Daily, a Xinhua-affiliated business newspaper, which accused Foxconn of not paying the housing funds for workers for years – an amount estimated at 200 million yuan (HK$228 million) a year.

Under the State Council’s Regulation on Management of the Housing Provident Fund introduced in March 2002, employers must contribute to housing funds for their workers or face fines of up to 50,000 yuan and possible court action. The contribution is a certain percentage of the employees’ salary.

The media report about the housing fund violation at the Foxconn subsidiary comes as the world’s largest electronic gadget manufacturer faces intense scrutiny over work conditions, long overtime and military-style management at its main factory in Shenzhen, where 10 workers have committed suicide and two others have severely injured themselves in attempted suicides.

Foxconn on Wednesday announced pay rises of at least 30 per cent to 1,200 yuan a month for production line workers from Monday in the wake of the suicides.

The Foxconn subsidiary in Yantai, which began operation in July 2005, is the largest export-oriented enterprise in Shandong with 80,000 employees.

The company is required to pay about 2,500 yuan a year into housing funds for each worker.

Foxconn spokesman Liu Kun said yesterday that the company was looking into the media report without elaborating.

Quoting Foxconn workers at the Yantai subsidiary, the Economic Information Daily said the company did not contribute to housing funds for workers even though they had been working at the Yantai branch for up to four years.

Zhang Xiang, an official at the economic zone’s Bureau of Finance, told the paper they had tried without success to talk Foxconn into complying with the regulation.

Zhang, who is in charge of housing funds, also said Foxconn had never been punished for breaching the housing fund regulation despite complaints from workers.

Official statistics show that housing fund administration authorities in Yantai collected 1.9 billion yuan in housing funds last year from 6,329 employers on behalf of 449,800 workers, who account for 68 per cent of the city’s total workforce.

Some analysts said the breaches were possible because authorities usually turn a blind eye to the practice in the name of protecting investment and workers rarely dared to complain for fear of dismissal.

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