By Lorraine Luk TAIPEI--Apple Inc.'s (AAPL) major supplier Hon Hai Precision Industry Co. (2317.TW) said Friday it has raised basic salary by 16% for its production line workers in Zhengzhou, Henan province of China, as it has difficulty recruiting labor in the area. Hon Hai, known by its trade name Foxconn, also said it has reduced the probation period for all entry-level employees to three months from six months in China as part of its continued effort to improve working conditions. The company, which assembles iPads and iPhones, has over one million employees in China. Hon Hai, the world's largest contract manufacturer of electronics products, has been facing pressure to improve wages and working conditions for employees following several suicides at the company's facility in Shenzen in 2010 and an explosion at a plant in Chengdu in 2011 that killed four workers. Following the incidents, Hon Hai increased salaries and outfitted worker dormitories with safety nets. The pay rise and reduction in probation comes after Washington-based Fair Labor Association urged Hon Hai to improve its working environment earlier this year. Apple Chief Executive Tim Cook visited an iPhone factory in Zhengzhou in March, a month after the FLA audits began. Hon Hai has about 150,000 employees in Zhengzhou. FLA said Wednesday that Hon Hai has fixed some of the most pressing workers' rights violations at three of its Chinese factories and is on track to address other problems by mid-2013. The nonprofit organization also said manufacturing facilities run by Hon Hai already have benefited from physical improvements such as ergonomic breaks and better maintenance of safety equipment, and the company is backing a local law adjustment that will extend unemployment insurance to more workers. The electronics supplier also identified 89 tasks it completed ahead of schedule, though the FLA said some of its most challenging goals-which include lowering overtime hours for more than 170,000 employees to within legal Chinese limits-remain a work in progress. Starting from Aug. 1, monthly basic salary excluding overtime compensation for production line workers in Zhengzhou plant was raised to 1,800 yuan from 1,550 yuan, Hon Hai said in a statement late Friday. All production line workers will receive a bonus of 200 yuan per month during the peak months of August to November, it added. Write to Lorraine Luk at lorraine.luk@dowjones.com Subscribe to WSJ: http://online.wsj.com?mod=djnwires
