Serious allegations have emerged against Hyundai following a lawsuit filed by the U.S. Department of Labor. The issues stem from SMART Alabama, a now-defunct subsidiary of the automaker, which reportedly employed children as young as 12 at its stamping plant in Luverne, Alabama. Reuters initially reported these claims, and subsequent investigations uncovered even more troubling details.
To provide some context, a dozen facilities in Alabama run by two subsidiaries, SMART Alabama and SL Hyundai, were found to have numerous underage workers on their payroll. These minors were not segregated from adult workers; instead, they worked alongside them under hazardous conditions. Some supplier facilities linked to Hyundai and Kia had recorded health and safety violations, including risks of amputations.
Hyundai attributes the issue to third-party staffing agencies, claiming they either failed to conduct adequate background checks or employed children illegally, often migrant minors. In response, Hyundai severed ties with SMART Alabama and engaged an independent auditor to monitor SL Hyundai. Interestingly, the company’s self-imposed penalty of $30,000 for these breaches was more severe than the fine issued by the U.S. Department of Labor.
The latest lawsuit highlights further exploitative labor practices. As reported by CNN, a 13-year-old worked on an assembly line in Alabama for as many as 60 hours each week. This time should have been invested in school, leisure activities, and rest—not in manufacturing car parts.
“It is shocking to discover a 13-year-old working on an assembly line in the United States,” said Jessica Looman, the Wage and Hour Division Administrator. “As we strive to eliminate illegal child labor wherever we find it, we will also ensure that all employers are held accountable for breaking the law.”
The allegations state that the child worked in sheet metal stamping from July 11, 2021, to February 1, 2022. According to the CNN report, Hyundai, SMART Alabama, and Best Practice, a staffing agency, are accused in the federal lawsuit of “violating child labor provisions of the Fair Labor Standards Act.”
In a statement to CNN, Hyundai declared its plan to “vigorously defend the company.” The automaker emphasized its collaboration with the Department of Labor’s investigation but avoided taking full responsibility for the employment of the 13-year-old.
“Upon learning of the alleged violations by our suppliers, we acted without delay,” the company stated. “At our urging, the suppliers terminated their relationships with the third-party staffing agencies, which had previously certified that individuals were of legal working age.”
CNN was unable to contact Best Practice for comment, and SMART Alabama did not provide a response regarding the lawsuit.
The Department of Labor’s lawsuit, filed in federal court in Alabama, seeks an injunction to prevent the companies from employing child labor in the future and demands the return of any profits earned through such practices. Hyundai reported record-breaking sales for the third consecutive year in 2023, while Kia also achieved record sales last year.
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