KUNSHAN – Apple has reportedly suspended new business with Pegatron after discovering labor violations at a student workers’ program.

After discovering several weeks ago Pegatron misclassified student workers and allowed some to work nights and overtime in violation of the OEM’s Supplier Code of Conduct, Apple reportedly placed Pegatron on probation until corrective action is completed.

An Apple investigation failed to uncover evidence of forced or underage labor but did reveal Pegatron falsified paperwork to hide violations. For its part, Pegatron said the violations took place at its Shanghai and Kunshan campuses, and students working at night or overtime and in positions unrelated to their majors were “not in compliance with local rules and regulations.”

A labor rights group is questioning Apple’s statement, however. China Labor Watch says it notified Apple two months ago of ongoing violations at Pegatron, and that Apple’s subsequent audit ignored the evidence.

CLW claims a dispatch worker at Pegatron died after he was compelled to work overtime. Apple denies the claim, CLW said.

Analysts say the move won’t affect Pegatron’s current iPhone production but could mean fewer orders next year.