Chaumtoli Huq
By Earl V. Brown, Jr. and Kyle A. deCant
Earl V. Brown, Jr. is the Labor and Employment Law Counsel at the AFL-CIO Solidarity Center, past Co-Chair of the ABA Labor Law Section’s Committee on International Labor and Employment Law, and a Fellow of the American College of Labor and Employment Law.
Kyle deCant is an associate (bar admission pending) at Guerrieri, Clayman, Bartos & Parcelli, P.C., a union-side law firm in Washington, DC.
As employers in the United States and around the world seek to avoid compliance with basic labor law standards by misclassifying young workers as interns, interns and their advocates are fighting back. These employers seek to drive down labor costs and increase their profit margin on the backs of young workers. However, the U.S. has long promulgated standards for determining when internships require just remuneration, and the Obama administration has recently stiffened enforcement of interns’ rights. The European Union, too, has a charter laying out basic principles to encourage educational and practical internships, and the United Nations International Labor Organization’s Human Resources Development Convention provides a framework in international law for proper vocational training. These measures are crucial to ensuring basic rule of law, and preventing internship exploitation from being the next front in a global race to the bottom.
Internship exploitation is hardly a Western phenomenon—it is also at the heart of labor unrest in the world’s fastest growing economy. China has long been at the center of the global “race to the bottom” in wages, hours and working conditions. Persistent worker protests led China in 2008 to address these abuses in a wave of labor reform legislation. These laws, notably the 2008 Labor Contract Law, aimed at eliminating exploitive practices such as the wholesale subcontracting of core work and endless temporary work contracts. These laws also enhanced penalties and remedies for employer abuses.
In their quest for cheap labor, manufacturers such as Foxconn that works in China and is a supplier to global electronic companies such as Apple, Sony, and Toshiba, adopted two strategies to end run China’s 2008 labor reforms. First, they ramped up the use of so-called “dispatch,” or subcontracted workers hired from agencies under temporary work arrangements, precluding these contingent workers from labor law protections afforded regular employees. Second, employers misclassified significant portions of their industrial and service workforce as “student interns.” Like dispatch workers, these “student interns” performed work identical to the employers’ regular employees, but without full labor protections.
Employers were using legal fictions to avoid paying their workers in compliance with Chinese law, and to deny them job security and safe working conditions. Last year, China took action to plug the abuse of dispatch labor by restricting the time period for deploying agency dispatch workers, enhancing the rights of dispatch workers vis-à-vis dispatch agencies and banning wholesale subcontracting of core functions.
However, Foxconn and other major Chinese employers are still undermining labor law protections by misclassifying large sections of the gigantic industrial and service sector workforce as “interns.” They assert that these young workers are not covered by China’s labor law reforms, although they in fact perform routine industrial and service labor at substandard wages for long hours without any compensating educational benefits. Indeed, a widely slammed whitewash of Foxconn’s labor practices by the Fair Labor Association, a corporate social responsibility outfit funded by multinationals, parroted the claim that “the general protections of the labor law do not apply to interns, including the social security benefits that normal workers receive.” Our analysis of China’s labor law framework challenges that assumption. A commonsense reading of the labor and educational statutes and regulations protects all interns who work without any educational benefit. Legal artifices such as the misclassification of these workers as “interns” should not serve to deny this large group of workers access to the protections and remedies of labor law.
About 8 million industrial interns work on China’s assembly lines each year. Foxconn alone exploits so many vocational students that it boasts perhaps the largest internship program in the world, with as many as 430,000 interns in 2012—one third of its entire workforce. The Ministry of Education even plans to boost vocational enrollment by 26% over the next six years, raising the number of vocational students from 29.4 to 38.3 million—opening up a vast potential pool of subminimum labor.
Local governments coordinate with factories and the service sector to impose worker quotas on vocational schools. Vocational schools fill these quotas by shipping students to worksites to perform cheap labor under the guise of “internships” that have zero educational or vocational value. Students are assigned to routine factory of service work regardless of their fields of study. They work excessive hours at less than legal standard wages. If injured or exposed to harmful chemicals at work, they are treated as outside labor law, and therefore are barred from the labor law remedies of mediation, arbitration and judicial relief.
Vocational students often have no choice: if they turn down the assigned internships, they cannot graduate. Without a certificate of graduation from their vocational institution, these students cannot effectively compete in the job market. Given that the International Labor Organization’s Forced Labor Convention defines forced labor as “all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily,” the coercive element of these internships renders them “forced labor” in violation of international law.
Forced into assignments that leave them unskilled at graduation, these interns suffer long hours and abusive, “military-style” discipline. Trapped in this exploitative work environment, the interns’ mental health suffers. In response to a long series of worker suicides, Foxconn’s response was to secure nets outside the windows of worker dormitories, and to require interns to sign a document pledging not to commit suicide. Hours remain brutal, however, and Foxconn CEO Terry Gou still denies that working conditions prompted his young workers to take their lives.
In the meantime, the multinationals responsible for this exploitation cannot police themselves. When Apple attempted to deny its own responsibility in a Corporate Social Responsibility report earlier this year, activists dismissed those claims as “completely absurd.” Further, independent scrutiny has found assurances of improvement to be unreliable. Despite a 2013 report’s claim that Foxconn has not been exploiting any interns at its factory in the city of Chengdu since September 2011, over 7,000 interns were toiling in the plant at that very time.
There are growing calls from inside China for plugging the intern loophole, as well as the beginnings of critical judicial scrutiny of these internships lacking in any educational benefits. More importantly, the interns themselves are striking for full legal labor rights on par with regular employees. When China ratified its labor reforms in 2008, it did so to calm the worker unrest that threatened to disrupt its rapid economic rise. These laws cover all industrial workers, including those who are misclassified as “interns” and perform work without any educational benefit. Providing this basic rule of law to interns is crucial both to the young workers entitled to a decent education and to the stability of entire global supply chains that profit off of these interns.
A copy of Brown and deCant’s article about this issue, “Exploiting Chinese Interns as Unprotected Industrial Labor,” is available here.
