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Friday, July 16, 2010, 05:25 am PT (08:25 am ET)

Foxconn denies Apple boosted employee pay following suicides

Apple is not directly compensating Foxconn workers, an executive with the overseas manufacturing partner said this week, denying a rumor that first formed last month as a number of suicides gained public attention.

Foxconn officially denied that the Mac maker is paying employees a 2 percent subsidy on labor costs, according to Taiwanese industry publication DigiTimes. An executive from Foxconn said that the rumor was just speculation, and his company has never received any subsidies from Apple.

That refutes a report issued in early June, which alleged that Apple was directly providing raises to Foxconn employees after a number of suicides occurred at the company's massive factory in Shenzhen, China.

Apple Chief Executive Steve Jobs spoke on the Foxconn issue last month at the All Things D Conference. He said that his company was "on top of" the matter, and that Foxconn "is not a sweatshop."

"It's a factory, but my gosh, they have restaurants and movie theaters, but it's a factory," Jobs said. "But they've had some suicides and attempted suicides, and they have 400,000 people there, The rate is under what the U.S. rate is, but it's still troubling."

The company did reveal in May that it will give a 20 percent pay raise to its employees. 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.