Samsung Electronics says its audit of Chinese suppliers found illegal labor practices such as excessive overtime.
Samsung said Monday it found instances of Chinese employees working overtime beyond legal hours and being fined for absence or tardiness.
Samsung conducted a four week audit of 105 suppliers in China after allegations it was ignoring illegal labor practices.
China Labor Watch, a New York-based labor rights group, said in August that Samsung's suppliers hired children and working conditions were "inhumane." Samsung said its audit team found no child labor.
But Samsung said its suppliers must adopt new hiring procedures and it would cancel contracts if child labor is found in future.
It said it will eliminate illegal overtime by the end of 2014.
Samsung is auditing 144 more suppliers in China.