Recruiting in China

By NICK WINGFIELD

Microsoft Corp. said it is investigating allegations of worker abuse at a factory in China that makes computer mice, cameras and other devices for the technology giant.

The move was prompted by a report published this week by a Pittsburgh-based human rights advocacy group, the National Labor Committee, which alleges a factory in Dongguan, China, operated by KYE Systems Corp. overworks young employees and houses them in harsh conditions.

Microsoft devices represent a significant portion of the products made at the factory, though KYE makes products for other companies there as well, according to the report.

"The factory was really run like a minimum security prison," Charles Kernaghan, director of the National Labor Committee, said in an interview.

In a statement issued in Taiwan, where it has headquarters, KYE Systems said it has never hired workers under 16, and that its employees get one day off every seven, with extra hours in peak season but never more than 12 hours a day. It said that while its wages are low by U.S. standards, they are in accordance with Chinese regulations. "We regret that the NLC reported a one-sided story without offering us a chance to explain," the statement said. The company's Web site says it employs between 3,600 and 4,500 workers in China, depending on seasonal demand.

In a blog post on Thursday, Microsoft executive Brian Tobey said, as a result of the National Labor Committee's report, the company has "a team of independent auditors en route to the facility to conduct a complete and thorough investigation."

Mr. Tobey said Microsoft auditors inspect KYE facilities annually and haven't detected violation of child labor laws for the past two years. He said worker overtime "has been significantly reduced" at the factory and that compensation is in line with labor standards for the area where the factory is located.

Mr. Tobey is corporate vice president of manufacturing and operations for the Microsoft unit that makes the Xbox videogame console, the Zune music player and other hardware.

The National Labor Committee report alleges KYE recruits employees many of whom are 16 and 17 years old to work 15-hour shifts six to seven days a week, paying them 65 cents an hour—or 52 cents an hour after deductions for food.

Workers are housed in cramped quarters in factory dormitories and prohibited from talking, listening to music or using the bathroom during work hours, the report says.

The report is another sign of growing scrutiny of the companies the technology industry widely relies on to make electronics products.

In February, Apple Inc. said an internal audit of its suppliers last year uncovered more than a dozen violations of the company's labor policies, including several in which contractors hired underage workers. Apple began auditing worker conditions after reports of worker abuses at Chinese factories that made iPods.
—Ting-I Tsai contributed to this article.