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Tuesday, June 01, 2010, 08:10 am PT (11:10 am ET)

Apple rumored to directly provide raises to Foxconn employees

A new report suggests Apple could address employee issues with its manufacturing partner Foxconn by directly compensating workers with profits from products assembled overseas, including the iPhone and iPad.

According to CBS-owned Chinese news site Zol.com.cn, Apple plans to provide Foxconn employees between 1 percent and 2 percent of the profits from its products. The report was translated by MIC Gadget.

The media outlet said that Apple conducted an investigation of Foxconn, as it publicly promised to do, and found that recent employee suicides were related to low wages at the company's massive factory in Shenzhen, China. The Cupertino, Calif., company could address the issue by providing additional wages to workers that would come directly from the profits of products assembled there.

The report claims that the first to receive the pay boost will be those who work on the iPad production line. Currently, it said, Apple pays Foxconn about 2.3 percent of the total price of the iPad.

Last week, Foxconn announced it plans to give a 20 percent pay raise to its employees. The revelation came after at least 10 people committed suicide at the Chinese plant this year alone.

Entry-level workers at the company's factory in Longhua reportedly earn just over 900 yuan, or $131.80 U.S. per month before overtime and bonuses. A recent undercover report from Southern Weekend revealed that employees sign "voluntary overtime affidavits" to take home more than the local minimum wage that can be earned through a regular 36-hour workweek.

Apple's own investigation into Foxconn was announced last week. The company said it is "saddened and upset" by the suicides that have occurred there recently, and it would assign its own investigative team to carry out an independent inquiry.

Apple, along with numerous other electronics makers, partners with Foxconn for the building of its products. The Taiwan-based company assembles iPhones and iPads for Apple. Last week, other technology giants, including Nokia, Sony, Dell and HP, joined in showing concern over the labor conditions at the Chinese factory.