Tesla Motors to probe reports of labour exploitation by vendors

17 May 2016


Tesla Motors yesterday said it would probe reports that immigrant labour was being exploited by subcontractors and were working for less than $5 per hour at its Fremont factory.

The statement wads in an immediate response by Tesla to an investigation by The Mercury News.

Federal regulators also said they were interested in the case, but would not confirm or deny an official review was planned.

The newspaper's investigation, The Hidden Workforce Expanding Tesla's Factory, was published on Sunday and featured Gregor Lesnik, a 42-year-old Slovenian labourer who suffered a serious injury in a 2015 factory accident.

The accident, lawsuit and investigation revealed Germany-based manufacturer, Eisenmann, and a Slovenian subcontractor, ISM Vuzem, employed at least 140 imported workers on B-1/B-2 visas at substandard wages to build a paint shop.

According to immigration experts, the construction might also have violated visa regulations, which broadly prohibited visa holders from performing hands-on work.

In a tweet on Sunday evening, Tesla Motors CEO said he had just heard about the story. ''Sounds like the wrong thing happened on many levels,'' Musk wrote. ''Will investigate and make it right.''

In a statement issued yesterday, Tesla said it acted legally, but held itself to higher, moral standards. ''If Mr. Lesnik or his colleagues were really being paid $5 an hour,'' the company said, ''that is totally unacceptable.''

In California workers are to be paid $10 per hour as minimum wage under the law.

''Tesla expects all its contractors and their subs…to comply with all applicable pay laws,'' the company told The Mercury News.

The Mercury News reported the case of the Slovenian worker who was severely injured in 2015 after falling 30 feet onto the factory floor. The worker has sued Tesla, Eisenmann, and ISM Vuzem - all of whom denied legal responsibility for his injuries for unspecified damages.

Claiming that his job violated B1 visa requirements, Lesnk said his employers were in breach of wage and employment laws. The suit claims the foreign workers were owed $2.6 million in overtime and wages.

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