Foxconn to Raise Base Salary of New Employees

By Liao Jiehua
Published: 2011-02-22

Feb 22, 2011
Translated by Guo Wei
Economic Observer Online
Original article:

Foxconn International Holdings Ltd, a subsidiary of Hon Hai Precision Industry Co Ltd - a Taiwan-listed contract manufacter of electronic goods, has announced it plans to once again adjust the salary packages of some of the more than 220,000 individuals it employess in a number of huge factories in the southern manufacturing center of Shenzhen.

The new round of salary adjustments at the company, follows two major wage hikes in 2010 and will lift the minimum-salary level of those working in the Shenzhen factories to over 1,550 yuan a month.

Liu Kun, a spokesperson for Foxconn, told the EO that under this latest round of pay adjustments, salaries will only increase and there will be no decrease in salaries, but he also emphasised that it was misleading to refer to the adjustment as the third pay rise for the company's workers.

Pay Will Only Rise

According to the new system, Foxconn that will pay newly-recruited workers at the company's Shenzhen factories no less than 1,550 yuan a month. When other unspecified welfare payments are take in to account, their final pay will be somewhere between 2,100-2,800 yuan a month.

After workers have passed a six-month probation period, their base pay will be a minimum of 1,650 yuan a month.

If workers are then deemed to have met work expectations over the following three-month period, the employee is entitled to a base salary of 2,000 yuan a month, which means that after other income is taken into account, the worker's total salary would rise to between 2,700 and 3,600 yuan a month.

Liu Kun said, the adjustments are aimed at attracting new workers and do not represent a pay rise.

Liu also explained that the adjustments are more about the logistics of supplying certain services to employees, noting that after the salary package for new hires comes into effect, Foxconn will alter the way in which it provides meals and housing to workers.

In the future workers at Foxconn's Shenzhen factories will have regular subsidies for accomondation and meals paid directly into their bank accounts. According to Liu Kun, this is what has led to what appears to be an increase in base pay.

On Jun 25 last year, after a spate of attempted suicides among Foxconn workers focused media attention on the company, Foxconn contracted out managment of employee housing to another company.

Liu Kun also said, while worker's compensation would basically remain stable, their base salary and overtime rates would both increase.

Labor Shortages

After Chinese New Year, a new round of labor shortages has made hiring at Chinese factories diffiuclt and Foxconn has also been hit.

Foxconn has set up recruiting stations close to railway stations in Chengdu and Zhengzhou and is attempting to attract more workers by offering better terms.

At the Longhua Science & Technology Park in Shenzhen, the number of applicants have been growing daily since Feb 6, with more than 10,000 queing for work every day after Feb 14.

The company is currently recruiting about 4,000 workers every day.

Foxconn currently operates 12 factories in nine cities across China.

The company also recently announced plans to set up factories in Chengdu, Wuhan and Zhengzhou.

This article was edited by Paul Pennay


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