Apple has conducted an audit (PDF) of 102 manufacturing facilities of its suppliers in 2009 and found that many of them don't meet Apple's Supplier Code of Conduct (ASCC).
Many of the companies, a lot of them are located in China, were found to grossly violate labor rules.
At least eleven 15-year old children were found to be working in three factories which manufacture products for Apple, and 55 of the 102 factories were ignoring Apple's rule that employees cannot work more than 60 hours a week, which is already a violation of China's official labor law that sets a maximum 49-hour week for workers. One of the more extreme cases was a factory that abused its workers with seven days of continuous work, but Apple claims they've terminated all contracts with this company.
Wages are also an issue, only 65 percent of the suppliers were paying their staff the correct wages and benefits, and Apple found 24 Chinese factories weren't even paying the country's minimum wage of around 800 yuan (approx. US$117) per month. Moreover, only 61 percent of Apple's suppliers were following rules to prevent injuries in the workplace, some companies incorrectly dispose hazardous waste, and 43 percent didn't have the correct environmental permits to operate.
Apple claims companies with core violations are required to address the situation immediately. These facilities will be re-audited at a later time, and may see all business with Apple terminated if they don't change their ways.
More info at Telegraph.