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Silicon Valley labor practices to be probed

Federal and state officials plan to probe alleged labor violations by Silicon Valley companies reportedly using Asian immigrants to assemble electronic goods at homes for much less than standard rates.

Federal and state officials plan to open an investigation next week into alleged labor violations by Silicon Valley companies that are reportedly using Asian immigrants to assemble electronic goods at homes for much less than standard rates.

The Labor Department and the California Labor Commissioner's Division of Labor Standard's Enforcement will form a task force to investigate whether several large companies have violated child labor, safety, tax, and overtime laws, a spokeswoman for the federal agency said.

"We have not determined which companies we're going to look at," regional Labor Department spokeswoman Deanne Amaden said.

The San Jose Mercury News, which published two reports on the alleged abuses, reported that Hewlett-Packard, Sun Microsystems, and Cisco Systems were among the firms that contracted with companies that paid workers for labor done in their homes.

According to those reports, at least a dozen contracting firms, from small businesses to giant corporations, had used piecework arrangements to try to hold down production costs. The articles also reported that the contracting work was done in the last year and possibly violated safety, tax, and labor laws.

Because of the difficulty of regulating home labor, federal officials said it was not known how common the practice is.

"It's not something that anyone regulates in terms of knocking door to door," Amaden said. The allegedly exploited workers may find their "current employment situation is to their advantage or they may not know that they are entitled to different paid benefits."

The Labor Department said it rarely receives any calls about these violations from workers.

Contracting out specialized work to smaller firms is a common practice in the industry. The contracting firms in turn often subcontract to even smaller outfits--with the final workplace being someone's home. The companies that contract out may not be fully aware of where and how their needs are met.

"But if the work is being done for them, they are still subject to labor laws," Amaden said.

The Hot Goods provision under the Fair Labor Standards Act can potentially be invoked if goods are produced by child labor, Amaden said. She added: "In those cases, we can stop shipment of those products."