A government investigation last year found that a supplier to Hyundai Motor Co. in Alabama used underage workers provided by a staffing firm. Media reports cited other instances as well. In response, Hyundai on Feb. 24 announced new workforce standards for its supply chain and that the results of an audit found none of its Tier 1 suppliers are employing underage workers.
“The use of underage labor at a supplier or any operation is unacceptable, and we are committed to making sure noncompliance never happens again. This is a zero-tolerance issue,” Hyundai President Jaehoon “Jay” Chang wrote in a letter to shareholders. “Even though there were issues with third-party staffing agencies that provided false documentation to these suppliers, ultimately, the responsibility is with Hyundai to make sure all our suppliers understand and meet our high global workforce standards.”
Five attorneys from law firm Littler Mendelson conducted the audit. It included interviews and site visits at 29 Tier 1 suppliers for Hyundai and found all to be in compliance with underage labor laws. In addition, Chang wrote the company is following up the audit with new workforce standards that include “discouraging the use of third-party staffing agencies” and other measures such as installing anonymous tip hotlines and validating applicant identification documents.
Regarding the two suppliers found last year with underage workers, one — SL Alabama — has agreed to the appointment of an audit committee to ensure compliance with labor laws. Hyundai is divesting its ownership interest in the other supplier, Smart.
Last October, the Alabama Department of Labor announced it issued monetary penalties of $17,800 each to SL Alabama and staffing firm JK USA after an investigation found that SL Alabama employed three minors — one age 13 and two age 15 — that were sent by JK. The youths operated plastic bonding machines. In addition, two 16-year-old employees were working without appropriate record keeping on site. SL Alabama produced headlights and mirrors at a facility in Alexander City, Alabama, the agency said at the time.
The US Department of Labor also announced in October that it had obtained a federal court order to stop SL Alabama from employing underage workers illegally and announced a civil money penalty of $30,076.
Reuters in July reported that a Smart plant in Luverne, Alabama, had employed underage workers as young as 12 years old.
The issue continued to generate concern. Early last month, 32 members of Congress wrote a letter asking the US Department of Labor to expand its investigation into violations of child labor law by automotive suppliers. Congressman Dan Kildee, D-Michigan, led the effort.
In addition, Hyundai in February held talks with the Department of Labor over the use of child labor at its suppliers, according to media reports.