Apple and its China manufacturing partner, Foxconn, agreed to improve wages and working conditions at factories accused of being sweatshops.

Under the agreement, Foxconn, which makes Apple devices from the iPhone to the iPad, will hire tens of thousands of new workers, eliminate illegal overtime, improve safety protocols and upgrade worker housing and other amenities.

It is a response to one of the largest investigations ever conducted of a US company's operations abroad. Apple had agreed to the probe by the independent Fair Labor Association (FLA) in response to a crescendo of criticism that its products were built on the backs of mistreated Chinese workers.

The association, in disclosing its findings from a survey of three Foxconn plants and over 35,000 workers, said it had unearthed multiple violations of labour law, including extreme hours and unpaid overtime.

Apple, the world's most valuable corporation, and Foxconn, China's biggest private-sector employer and Apple's main contract manufacturer, are so dominant in the global technology industry that their newly forged accord will likely have a substantial ripple effect across the sector.

The agreement is a sign of the increasing power of Chinese workers to command higher wages given climbing prices in China in recent years for everything from food to housing and medical care, and an aging workforce that has led to labor shortages.

Working conditions at many Chinese manufacturers that supply Western companies are considerably inferior to those at Foxconn, experts say.

"Apple and Foxconn are obviously the two biggest players in this sector and since they're teaming up to drive this change, I really do think they set the bar for the rest of the sector," FLA President Auret van Heerden told Reuters in an interview.

The Apple-Foxconn agreement may also raise costs for other manufacturers who contract with the Taiwanese company, including Dell Inc, Hewlett-Packard, Amazon.com Inc , Motorola Mobility Holdings, Nokia Oyj  and Sony Corp. It could also mean more work for cheaper contract manufacturers. - Reuters