Feds accuse Hyundai and two suppliers of using child labor

The U.S. Department of Labor is suing South Korean auto giant Hyundai Motor Co., an auto parts plant and a recruiting company after finding a 13-year-old girl illegally working on an assembly line in Alabama.

The agency filed a complaint Thursday in U.S. District Court for the Middle District of Alabama to require that Hyundai, SMART Alabama, an auto parts company, and Best Practice Service, a staffing agency, relinquish any profits related to the use of child labor. In the complaint, the Labor Department alleged that all three companies jointly employed the child. 

The move comes after federal investigators found a 13-year-old girl working up to 50 to 60 hours a week on a SMART assembly line in Luverne, Alabama, operating machines that turned sheet metal into auto body parts, the Labor Department said. The child worked at the facility, which provides parts to Hyundai Motor Manufacturing Alabama, over a period of six to seven months, and "instead of attending middle school, she worked on an assembly line making parts," the legal document stated. 

"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 statement. 

The Korean automaker is liable for repeated child labor violations at SMART Alabama, one of its subsidiaries, between July 11, 2021, through Feb. 1, 2022, according to the department. The child was allegedly dispatched to work at the component parts provider by Best Practice, it said.

According to the complaint, SMART told the staffing firm that "two additional employees were not welcome back at the facility due to their appearance and other physical characteristics, which suggested they were also underage."

"Companies cannot escape liability by blaming suppliers or staffing companies for child labor violations when they are in fact also employers themselves," Seema Nanda, solicitor of the Labor Department said in a news release. 

In a statement, Hyundai said it enforces U.S. labor law and expressed disappointment that the Labor Department filed a complaint.

"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."

"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.

Hyundai said its suppliers immediately ended their relationships with the staffing agencies named in the complaint, conducted a review of its U.S. supplier network and imposed tougher workplace standards. In addition, the company said it is now requiring its suppliers in Alabama to conduct independently verified audits of their operations to ensure they comply with labor laws. 

The case marks the first time the Labor Department has sued a major company for allegedly violating child labor law at a subcontractor, and stems from a government probe and separate Reuters report that unveiled widespread and illegal use of migrant child laborers at suppliers of Hyundai in Alabama. 

Reuters reported in 2022 that children as young as 12 were working for a Hyundai subsidiary and in other parts suppliers for the company in the Southern state. 

The wire service reported on underaged workers at Smart after the brief disappearance in February 2022 of a Guatemalan migrant child from her family's home in Alabama. The 13-year-old girl and two brothers, 12 and 15, worked at the plant in 2022 and were not going to school, sources told Reuters at the time. 

The Labor Department in fiscal 2023 investigated 955 cases with child labor violations involving 5,792 kids nationwide, including 502 employed in violation of hazardous occupation standards. 

Some minors have suffered serious and fatal injuries on the job, including 16-year-old Michael Schuls, who died after getting pulled into machinery at a Wisconsin sawmill last summer. Another 16-year-old worker also perished last summer after getting caught in a machine at a poultry plant in Mississippi.