Hyundai supplier accused of child labor violations by U.S. authorities

© Reuters. FILE PHOTO: The United States Department of Labor is seen in Washington, D.C., U.S., August 30, 2020. REUTERS/Andrew Kelly

By Mica Rosenberg, Joshua Schneyer and Hyunjoo Jin

NEW YORK (Reuters) - The U.S. Department of Labor on Monday accused a Korean-owned auto parts maker and supplier of Hyundai Motor Co of violating federal child labor laws at an Alabama factory, federal court filings reviewed by Reuters show.

The Department of Labor (DOL) said that SL Alabama LLC, a subsidiary of South Korea's SL Corp, employed underage workers at its Alexander City, Alabama factory, according to filings on Monday with the U.S. District Court for the Middle District of Alabama.

Since last November, SL Alabama "repeatedly violated" labor regulations by "employing oppressive child labor" and "minors under the age of 16," the DOL said in a six-page complaint.

In a statement to Reuters, SL Alabama admitted children had worked at the plant, which makes headlights, rear lights and other components for companies including Hyundai and its Kia affiliate. SL said the minors had been hired by an outside labor recruitment firm, which it didn't identify.

The revelations come one month after Reuters reported the use of child labor at another Alabama auto parts plant operated by Hyundai subsidiary SMART Alabama LLC. The Alabama Department of Labor at the time said it would coordinate with federal authorities to probe labor practices at that plant.

The discovery of child workers at a second Hyundai supplier signals widening scrutiny of labor practices in the automaker's U.S. supply chain. In an emailed statement late Monday, Hyundai said "it does not tolerate illegal employment practices in any Hyundai entity."

"We have policies and procedures in place that require compliance with all local, state, and federal laws," it added.

Along with the complaint against SL Alabama, a proposed settlement agreement between the government and the parts manufacturer was filed with the court. Under the terms of that agreement, SL Alabama agreed to stop hiring minors, punish any managers aware of the use of underage employees, and suspend any relationship with any recruiters who supply child workers.

The proposed agreement was signed Aug 18 by an SL Alabama attorney and a Department of Labor lawyer. It hasn't yet been signed by a judge.

The filings didn't detail how many minors worked at SL Alabama or what type of jobs they performed. It isn't clear whether the company or the labor contractors it works with face any fines or other penalties.

The DOL didn't respond to requests for comment.

In its statement to Reuters, SL Alabama said "we fully cooperated with the investigation by the Department of Labor, and we are in the process of complementing our verification system so that minors will not work going forward."

Both federal and Alabama law prohibit teens and children under the age of sixteen from working in most industrial factory settings because they can be dangerous for minors.

SL Alabama employs about 650 people at the Alabama facility, according to its website. Parent company SL Corp also operates a factory in Tennessee and research facility in Michigan.

Previous Reuters reporting has shown how some minors, often immigrants, get hired for Alabama factory jobs through recruitment agencies.

Although staffing firms help fill industrial jobs nationwide, they have been criticized by labor advocates because they enable employers to outsource responsibility for vetting employees and their eligibility to work.