July 29^th, according to the Wall Street Journal, China Labor Watch, headquartered in New York, released a new report on Monday. The report claims that Apple's Taiwanese major supplier Pegatron Corporation use underage workers, pay insufficient wages and force employees to work overtime. Such behaviors not only violate Chinese Labor Law, but also violate Apple's supplier policy.

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According to the report, Pegatron Corporation and its two subsidiaries can't ensure the employees' safety and healthy work environment. If the workers want to work somewhere else, the company will withhold their payments and the identification cards. In addition, the living conditions for those workers are very poor, including constant noise, working overtime, crowded dormitories and cold-water shower.

Apple confirmed that some labor brokers were indeed withholding workers' ID cards. Apple has demanded Pegatron Corporation to stop it at once. The U.S. company promises that it will investigate the facts reported by the China Labor Watch and will take corrective action if needed.

Jason Cheng, the Chief Executive in Pegatron Corporation, said: "We will investigate it fully and take immediate actions to correct any violations to Chinese labor laws and our own code of conduct."

Analysts estimate the iPhones and iPads, which were produced in the factory of Pegatron Corporation in the Pudong district across the river from downtown Shanghai, account for one-third of Apple's total shipments. With the surge in orders, Pegatron Corporation has expanded its workforce from 50,000 in March 2013 to 70,000 so far.

A worker surnamed Zhu said she was hired through an intermediary recruiting agency, and she had to work for three mouths to avoid to be fined by the intermediary agency. But when they were hiring workers, they won't tell employees anything about these special demands.

Pegatron Corporation replies: "It is inappropriate for intermediary agencies to keep a portion of workers' payments if they quit early, and we are investigating about the situation. Moreover, we have paid the intermediary agencies for the workers' social security. It is illegal for them to not provide insurance for the workers. We will conduct periodic audits of these agencies to see whether they are providing insurance for our workers. They will be penalized if they don't obey the law."