U.S. Department of Labor Sues Hyundai for Child Labor Violation, Highlights Broader Problem

Hyundai faces big legal trouble after it was discovered that one of its suppliers in Alabama was illegally using child labor to produce components for the South Korean auto giant

The intricate web of suppliers that help provide components to an automaker plays a key role in how that company assembles automobiles. However, the highly interconnected nature of this web can also mean that sometimes, determining responsibility can be complicated if something illegal is happening in the process of vehicle production.

Hyundai is finding this out the hard way after the U.S. Department of Labor announced that it was suing Hyundai and two other companies for illegally using child labor in its operations. The incident is not only giving Hyundai bad publicity, but also shines a light on how illegal child labor is still occurring often in places where you least expect it.

Building body panels instead of going to school

In Hyundai’s case, the incident took place at SMART Alabama a supplier for the company where it was revealed that the firm illegally employed a 13-year old girl on the assembly line. Instead of going to middle school, the child was on the line operating sheet metal machines that transformed the material into body panels for Hyundai vehicles. The Department of Labor says that this went on for six to seven months with the girl working 50 to 60 hours a week producing parts before the illegal activity was discovered.

“A 13-year-old working on an assembly line in the United States of America shocks the conscience,” Jessica Looman, the DOL’s wage and hour division administrator, said in a brief statement detailing the situation.

The feds determined that while the child didn’t work at a formal Hyundai facility, SMART, Hyundai, and staffing firm Best Practice all jointly employed the child and therefore shared joint responsibility for the illegal activity. As a result, the DOL is now taking action with the agency asking a U.S. District Court judge to force all three companies to relinquish any profits that they might’ve gained during the time that they used child labor. This case is also the first time the government has gone after a major company for violations at a subcontractor and follows on the heels of separate probes and a report from Reuters that revealed multiple Hyundai suppliers in Alabama illegally using child labor

More Hyundai Stories

• First Drive: Hyundai Ioniq 5 N Sets the Benchmark for EV Performance
• Exclusive: Hyundai Rethinks EV Plans – New Georgia EV Plant May Add Hybrids, Gas Models
• Hyundai Confirms New Paywall Structure for Select Vehicle Features, Sees Future in Vehicle Subscriptions

Hyundai stands its ground

In a separate statement, Hyundai stated that it enforces U.S. child labor law and that it was disappointed about the complaint filed by the Department of Labor.

“The use of child labor, and breach of any labor law, is not consistent with the standards and values we hold ourselves to as a company,” Hyundai said in a statement. “We worked over many months to thoroughly investigate this issue and took immediate and extensive remedial measures. We presented all of this information to the U.S. Department of Labor in an effort to resolve the matter, even while detailing the reasons why no legal basis existed to impose liability under the circumstances.”

The company elaborated further stating “Unfortunately, the Labor Department is seeking to apply an unprecedented legal theory that would unfairly hold Hyundai accountable for the actions of its suppliers and set a concerning precedent for other automotive companies and manufacturers,” the company added.

As for SMART Alabama, the complaint alleges the company told Best Practice “two additional employees were not welcome back at the facility due to their appearance and other physical characteristics, which suggested they were also underage.” The Labor Department wasn’t buying that explanation from the supplier and Seema Nanda a solicitor for the Department of Labor said in a statement “Companies cannot escape liability by blaming suppliers or staffing companies for child labor violations when they are in fact also employers themselves.”

Incident reveals a bigger lingering problem

While the use of child labor by SMART Alabama is shocking, it also represents a bigger problem that often occurs behind the scenes in some corporations. Labor shortages and a surge of unaccompanied migrant children from Central America have created a dangerous cocktail of circumstances with some companies attempting to solve their labor shortages by employing these children to fill the gap.

Many of the industries where this new generation of child workers are employed place them in fields where hazardous materials are used or in undesirable jobs that are often avoided by the majority of American workers. That has contributed to a rapid surge in child labor violations and the U.S. government has recently begun taking a tougher stance to try and combat the problem including stiffer penalties for any company caught using child labor.