The U.S. Department of Labor filed a lawsuit against Hyundai Motor Co., along with an auto parts plant and a labor recruiter, over the illegal use of child labor in Alabama. The complaint, submitted to the U.S. District Court in Montgomery, Alabama, seeks to have the companies forfeit any profits derived from using child labor.
In 2022, Reuters reported that children, some as young as 12, were employed by a Hyundai subsidiary and other parts suppliers in Alabama. The Labor Department’s filing named three defendants: Hyundai Motor Manufacturing Alabama LLC; SMART Alabama LLC, an auto parts company; and Best Practice Service LLC, a staffing firm, for employing a 13-year-old child.
The Wage and Hour Division found that the child had worked up to 60 hours a week on an assembly line at SMART, operating machines that formed sheet metal into auto body parts.
SMART supplies parts to Hyundai Motor Manufacturing Alabama, which assembles popular models such as the Hyundai Santa Fe, Tucson, and Santa Cruz. The complaint noted that SMART informed the staffing firm that two additional employees were unwelcome due to their appearance and physical characteristics suggesting they were underage.
Solicitor of Labor Seema Nanda emphasized that companies cannot deflect responsibility for child labor violations onto suppliers or staffing firms when they are also employers.
A Reuters investigation highlighted the illegal employment of migrant children in Alabama factories supplying parts to Hyundai and Kia, following the brief disappearance of a Guatemalan migrant child from her home in February 2022.
The 13-year-old girl and her two brothers, aged 12 and 15, worked at the plant in 2022 and were not attending school. At that time, SMART was a Hyundai subsidiary.
The Labor Department stated that SMART's operations were so integrated with Hyundai's main plant that the two were a single employer under U.S. labor law, jointly employing the minor with the staffing firm.
Hyundai, in a statement, said it no longer owns SMART, which was renamed ITAC Alabama in 2023.
Hyundai spokesperson Michael Stewart mentioned that the company had conducted a thorough investigation, took extensive remedial measures, and required independent workforce audits by its Alabama suppliers.
Stewart criticized the Labor Department’s legal theory as unfairly holding Hyundai accountable for its suppliers' actions, setting a concerning precedent for other manufacturers. The parts supplier and staffing firm did not respond to requests for comment.
The Reuters reports in 2022 led to the rescue of several children from factory floors, sparked multiple investigations, and drew attention to the problem of child labor in the U.S. The Labor Department reported a surge in child labor violations, investigating cases involving 5,792 children nationwide, including hundreds in hazardous occupations, in the 2023 fiscal year.