Tesla calls cheap-labor dispute 'totally unacceptable'

Tesla calls cheap labor allegations 'totally unacceptable'

Tesla's reputation came under fire over the weekend after a report from The Mercury News claimed the car company had used cheap foreign labor to build one of its new facilities.

Mercury News alleged that Tesla contractor Eisenmann and a subcontractor ISM Vuzem hired more than 140 workers from Eastern European countries and paid them as little as $5 an hour to build a car-painting facility in California.

One such worker, Gregor Lesnik, is attempting to sue his employers after reportedly falling three stories while building the Tesla facility and breaking both his legs.

Tesla, which is known for its higher-than-average hourly wages, said if the claims against its contractors are true, they are "totally unacceptable."

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"Assuming the article is correct, we need to do right by Mr. Lesnik and his colleagues from Vuzem," Tesla wrote on Monday. "This is not a legal issue, it is a moral issue."

In the Monday statement, Tesla denied knowledge of its contractors' possible underpayment of workers; representatives declined to comment further.

Neither Eisenmann nor Vuzem immediately responded to CNBC's request for comment.

Tesla says various authorities investigated Lesnik's incident and found it not responsible for compensation or injuries. However, the company noted that it will "do the right thing" if the claims are true. CEO Elon Musk took to Twitter, saying he learned of the incident on Sunday.

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"Morally, we need to give Mr. Lesnik the benefit of the doubt, and we need to take care of him. We will make sure this happens," Tesla said, in the statement.

Read the full report from The Mercury News