One of Apple's suppliers, the Taiwan-based Pegatron, has come under fire over working conditions at their factories employing around 70,000 workers. The US-based group that checks on a range of factories in China and neighboring countries, China Labor Watch, says that conditions at Pegatron's factories are "even worse" than at Foxconn, another of Apple's suppliers that has been in trouble for worker conditions in the past.

The group's investigation into the conditions at Pegatron has revealed 86 labor rights violations, split into 36 legal violations and 50 ethical violations. They allege a huge range of misconduct on the part of Pegatron, ranging from underage labor, poor living and working conditions, and excessive working hours, to health and safety concerns, abuse by management and various forms of discrimination.

It also claims that Apple doesn't respond to claims of worker abuse with the same urgency it applies to losses in product quality. This is compounded by reports that workers are working around 67 hours per week on average, above Apple's rule of just 60 hours per week and in violation of China's 49-hour work week rule.

In response to the report, Apple claims they have audited Pegatron facilities 15 times in the last six years, including a few surprise audits in the last 18 months. Both Apple and Pegatron say they will investigate the claims brought to light in the China Labor Watch report (PDF), which are "new" to them, and Pegatron refuted claims that employees are working above the maximum legal amount of work per week.

While Foxconn remains a primary manufacturing partner for Apple, the Cupertino-based firm shifted some production to Pegatron for devices such as the iPad mini. With a surge in orders, Pegatron had to add around 20,000 workers to its force to cope with the added strain. These added workers may have caused worker conditions to drop off significantly in factories, so hopefully Apple will deal with the claims swiftly and thorougly.

Aside from putting Apple and its manufacturing partners under the spotlight once again over worker conditions, a journal entry from one undercover investigator working on the assembly line appears to confirm the existence of Cupertino's long-rumored cheaper iPhone model. Here's the relevant portion:

Today's work is to paste protective film on the iPhone's plastic back cover to prevent it from being scratched on assembly lines. This iPhone model with a plastic cover will soon be released on the market by Apple.

The task is pretty easy, and I was able to work independently after a five-minute instruction from a veteran employee. It took around a minute to paste protective film on one rear cover. The new cell phone has not yet been put into mass production, so quantity is not as important. This makes our job more slow-paced than in departments that have begun mass production schedules.

The news follow leaked images of a plastic packaging "iPhone 5C" posted on a Chinese discussion board over the weekend. It's unclear at this point what the naming stands for, and if a more affordable iPhone indeed makes it to market, whether it'll be released globally or to certain emerging markets only.