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Charges dropped against Chinese automaker BYD in U.S. wage dispute

The logo of BYD (Build Your Dreams) is seen inside a showroom in Shenzhen, China's southern Guangdong province July 27, 2009. REUTERS/Tyrone
The logo of BYD (Build Your Dreams) is seen inside a showroom in Shenzhen, China's southern Guangdong province July 27, 2009. REUTERS/Tyrone

SHANGHAI (Reuters) - China's BYD Co Ltd <1211.HK> <002594.SZ> said a California labor law watchdog had dropped charges against it over wage payments in a case that had put the Warren Buffet-backed automaker's labor practices under the spotlight.

BYD was accused by the California Labor Commissioner's office in October of failing to pay five Chinese workers temporarily working in the United States the required minimum wage of $8 per hour.

BYD said in a statement on Wednesday that the Commissioner withdrew the case after the company defended itself by submitting documents that showed its workers were paid the equivalent of $12-$16 per hour.

But as BYD had paid the wages in Chinese currency instead of U.S. dollars - a practice that the Commission objected to - the company agreed to pay $1,900 to resolve the matter, it said.

BYD said that its hearing with California's Labor Commissioner's office will continue on two other matters - the alleged omission of information on employees' check stubs and the alleged denial of flexibility on rest breaks for eight employees. BYD said it denied the allegations.

The dispute highlights potential obstacles Chinese companies face as they begin to make inroads in mature markets like the United States and Europe where they are under more stringent industrial laws and regulations.

BYD, which makes electric buses in the United States, currently employs 50 local workers and plans to add 100 more next year.

The Chinese company is stepping up efforts to sell electric vehicles overseas. It signed several contracts last year, including one to supply the U.S. cities of Los Angeles and Long Beach, and to Amsterdam's Schiphol airport.

(Reporting by Samuel Shen and Norihiko Shirouzu; Editing by Edwina Gibbs)

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