Apple has placed Pegatron on probation following the discovery of student labor violations.
On Monday, Bloomberg reported that Pegatron, a key supplier in Apple's production chain, is being required to clean up its act -- and Apple will not give the company any new business until existing labor issues are rectified.
Several weeks ago, the iPhone and iPad maker found that students were being "misclassified" under Shanghai and Kunshan campus work programs and some were being allowed to perform overtime, work nights, or "perform work unrelated to their major" in violation of Apple's Supplier Code of Conduct (.PDF).
"We have a rigorous review and approval process for any student worker program, which ensures the intern's work is related to their major and prohibits overtime or night shifts," Apple commented.
In addition, Apple claims that the Taiwanese manufacturing giant falsified paperwork to disguise the students' work activities.
To this end, Pegatron has fired at least one manager overseeing the student program, citing the "extraordinary lengths" the individuals involved in the scheme went to prevent discovery. The students involved have since been taken off production lines.
"[We] worked with our customer and third-party experts to make appropriate arrangements for them to return to their homes or schools with proper compensation alongside all necessary support and care," Pegatron told Bloomberg.
Pegatron will not be taken off probation until corrections are made and checked.
This is not the first time Pegatron has ended up on Apple's watch list over labor issues. Back in 2013, the manufacturer was the subject of a report from China Labor Watch that alleged students in a summer program were being underpaid and inadequately cared for.
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- Apple One free with every iPhone? A services strategy to destroy Android
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