FORCED LABOR IN THE PRODUCTION OF ELECTRONIC GOODS IN MALAYSIA
A Comprehensive Study of Scope and Characteristics
by Verité
EXECUTIVE SUMMARY
[Pg 9]The conditions faced by foreign electronics workers in Malaysia have the potential to result in forced labor. In 2012, Veritéreceived funding from the US Department of Labor to conduct a study to determine whether such forced labor does, in fact, exist in the production of electronic goods in Malaysia.
[Pg 10]Forced labor is linked to recruitment fee charging and the indebtedness that follows. Recruitment fee charging of foreign workers was found to be pervasive in the study sample, and fees were often excessive.
Ninety-two percent of all foreign workers surveyed paid recruitment fees in order to get their jobs. The recruitment fees that workers paid for their jobs often exceeded legal and industry standards equivalent to one month’s wage.[2] Of workers reporting recruitment fees paid to employment agents in their home countries, 92% were excessive. Of respondents reporting fees paid to their employment agent in Malaysia, 99% reported excessive levels.
Worker indebtedness was strongly linked to excessive recruitment fees charged to workers in their home countries and in Malaysia.Seventy-seven percent of workers who were charged fees had to borrow in order to pay them. Workers who had to borrow money to pay recruitment fees reported paying higher fees, on average, than workers who did not have to borrow. This suggests that higher fees mean a higher likelihood of indebtedness for workers.
[Pg 11]Forced labor is also linked to deceptive recruitment: One in five workers in the study was misled in the recruitment phase about the terms of their employment agreement.
Twenty-two percent of foreign workers were deceived about their wages, hours, overtime requirements or pay, provisions regarding termination of employment, or the nature or degree of difficulty or danger of their jobs. These workers had little ability to change or refuse their jobs upon arrival.
Passport retention, which is prohibited by law in Malaysia[3], was widely experienced by workers in the study.Ninety-four percent of foreign workers in the sample reported that their passports were held by the facility or their broker/agent, and 71% reported it was impossible or difficult to get their passports back when they wanted or needed them.
[Pg 12]Many foreign workers in the study experienced poor living conditions, in housing provided by employers or third-party employment agents.
Thirty percent of foreign workers slept in a room with more than eight people, 43% of foreign workers said that there was nowhere they could safely store their belongings, and 22% of foreign workers said that they did not feel safe in their housing.
It was difficult for foreign workers surveyed by Verité to leave before the end of their work contracts.Fifty-seven percent of foreign worker respondents reported they could not leave their job before their contract was finished because they would either be charged an illegally high fine, would forfeit wages or runaway insurance, would be forced to pay the balance of the levy, would lose their passport, or would be denounced to the authorities.
Once on the job in Malaysia, 88% of foreign workers said they did not have the option to insist on a different job arrangement, and 92% said they did not have the option of refusing their job arrangement and returning home with job procurement costs refunded.
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