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Amazon has agreed to pay $61.7 million to the Federal Trade Commission to settle allegations of pay discrepancies with its Flex delivery drivers.
This comes after the Federal Trade Commission (FTC) filed a complaint accusing the trillion-dollar company of pocketing drivers’ tips while simultaneously lowering their hourly pay rate. The FTC unanimously approved the settlement amount.
“Our action today returns to drivers the tens of millions of dollars in tips that Amazon misappropriated, and requires Amazon to get drivers’ permission before changing its treatment of tips in the future,” the acting director of FTC’s Bureau of Consumer Protection said.
Complaint: Amazon Pockets its Flex Drivers’ Tips
The settlement will also prevent Amazon from falsely advertising how much its drivers will be paid and how much of the tips they’ll actually be receiving. This comes after the company stopped paying its drivers $18-25 per hour in 2016, and began using the tips its drivers earned to make up the pay difference in the new lower hourly rate, according to the FTC complaint.
Amazon allegedly secretly made these changes while continuing to assure customers and Flex drivers that 100 percent of tips would go to the intended driver.
“In fact, for a period of over two and a half years, without consumers’ permission, Amazon secretly used nearly a third of customer tips to subsidize its own pay to drivers,” the FTC complaint asserts.
Amazon drivers reportedly filed hundreds of complaints with the company. However, Amazon continued to collect Flex drivers tips for years until the FTC’s investigation. Once Amazon realized it was being investigated, it reverted back to its advertised pay model of giving Flex drivers 100 percent of their tips, according to the complaint.
Amazon disagrees with the FTC’s allegations, saying its Flex delivery drivers receive among the best hourly pay in the industry. Nonetheless, they agreed to pay back their drivers in the multi-million dollar settlement.
“While we disagree that the historical way we reported pay to drivers was unclear, we added additional clarity in 2019 and are pleased to put this matter behind us,” an Amazon spokesperson told CNBC.
Amazon Accused of Shortchanging Drivers in Other Ways
This isn’t the first time Amazon was accused of shortchanging its drivers. The company is facing a class action lawsuit in Ontario, Canada alleging it fails to pay its delivery drivers minimum wage. Lead plaintiff Denver Davis filed that one claiming that the company continuously monitors contractors’ work and requires them to participate in unpaid training, but doesn’t pay them as employees.
A class action lawsuit in British Columbia echoes the same claims. The lawsuit accuses Amazon and its delivery service partners of failing to compensate Class Members as required by the Employment Standards Act and other legislation. This allegedly includes the failure to pay delivery drivers minimum wage, statutory holiday pay, vacation pay, premium pay, for meal breaks not taken, and termination pay.
Are you a Flex delivery driver for Amazon? Do you believe that you’re being paid fairly? Tell us your thoughts in the comments section below!
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10 thoughts onAmazon Will Pay $61.7M Settlement After Allegedly Pocketing Flex Drivers’ Tips
I’ve been an Amazon Flex Driver in California since November 2020. I know I’ve been under paid and completely taken advantage of. I’ve been put in situations that were dangerous and punished for things beyond my control. After crunching numbers (milage, gas, time and wear and tear on me and my car) most of the time working for Amazon Flex was costing me money. I was spending my own money to deliver their packages. Reimbursement for all the hours and money I spent would be wonderful.
I work for Amazon flex for past 3 years. I believe I have had my tips stolen.
I was an amazon Flex driver in Sacramento California since Oct. 2017 until Dec 2020. They stole my tips and paid my hourly base pay with my tips the entire 3 years I worked for them. I sent many emails asking for the 100% of the tips I earned and they never acknowledged it. I asked and at times demanded for the $9.95 delivery fee they charged customers for orders under $35 and amazon never complied. Again ignored my emails. I would like to be included in the disbursement of this settlement.
I was just curious when this pays out? I started doing Amazon Flex in Nov 2017 and still do it to this day! Thank you!
I was a FLEX driver in MA. Please add me.
I delivered routes for Amazon Flex and definitely believe that tips were taken from me over the time in which I worked for them. Please advise how to be added to the class action suit
I was a delivery driver for Amazon Flex for a few years but my account was deactivated as of last year. I believe I am owed money and I would like to be added to this claim please
I am owed money by Amazon from work performed as an Amazon Flex Driver that has been deactivated.
I worked for Amazon Flex
Please add me
Personally delivered to my neighbor. I watched them type in 20 dollars as a tip. Well I delivered to 3 houses for that shift. For tips on those three stops I received 18 dollars. Called support they helped by saying well look into it. Thanks Amazon fresh I love working for a loss. That’s why I will not do any grocery orders for them.