Core Viewpoint - Xiaomi's internal work hour management policy has come under scrutiny due to reports of excessive working hours and potential violations of labor laws, particularly in relation to the upcoming EU regulations on forced labor [1][2][5]. Group 1: Internal Work Hour Policies - Reports indicate that Xiaomi enforces a strict work hour ranking system, requiring employees to average at least 11.5 hours per day, with some departments demanding up to 15 hours [1][5]. - Employees are penalized for working less than 8 hours in a day, needing to provide written explanations, which may create psychological pressure [6]. - External contractors are also subjected to rigorous work hour requirements, with daily minimums set at 11 hours [1]. Group 2: Legal Compliance Issues - Xiaomi's work hour policy appears to violate China's labor laws, which stipulate a maximum of 8 hours per day and 40 hours per week, with a maximum of 36 hours of overtime per month [2]. - The implementation of a work hour ranking system may constitute a form of "last place elimination," which is not compliant with labor laws [2][5]. - The lack of written documentation for work hour requirements suggests an attempt to evade legal accountability, raising concerns about the company's compliance practices [2][6]. Group 3: Implications of EU Regulations - The EU's upcoming "Forced Labor Prohibition Act" defines excessive working hours as a form of forced labor, which could classify Xiaomi's practices as illegal under EU law [3][5]. - The act requires companies to ensure that their entire supply chain is free from forced labor, which could complicate Xiaomi's operations if any part of its supply chain is found in violation [7]. - Xiaomi's brand image in Europe could be severely damaged if linked to forced labor practices, potentially leading to market access issues [7][9]. Group 4: Strategic Importance of the EU Market - The EU market represents a significant opportunity for Xiaomi, with a market share of around 15% in the competitive smartphone sector [9]. - Losing access to the EU market could not only result in direct revenue loss but also exclude Xiaomi from the global high-end manufacturing supply chain [9][10]. - Xiaomi's ambitions extend beyond smartphones, with plans to enter the European electric vehicle market by 2027, highlighting the strategic importance of compliance in this region [9].
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