FTC fines Amazon $61.7 million for withholding tips from Flex drivers2021-02-02 18:55 by Daniela
Tags: FTC, Amazon
Amazon will pay $61.7 million to Flex drivers to settle allegations of stolen tips, after an extensive investigation by the US Federal Trade Commission. The figure represents the total amount of allegedly withheld tips over the two and a half years that Amazon Flex's controversial base pay system was in place.
Under a delivery program called Amazon Flex, Amazon hires independent contractors to handle deliveries of Prime Now and Amazon Fresh orders, and sometimes Amazon.com packages as well. From 2015 to 2016, the company paid these drivers $18 to $25 per hour, plus customer tips. But the FTC alleges that Amazon surreptitiously changed its payment practice in late 2016 and began pocketing some customer tips to subsidize the company's payments of $18 to $25 per hour, while assuring drivers they were still receiving all their tips.
To make matters worse, the FTC alleges that Amazon "then intentionally failed to notify drivers of the changes to its pay plan and even took steps to make the changes obscure to drivers."
"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 said in a statement. "Amazon Flex delivery partners play an important role in serving customers every day, which is why they earn among the best in the industry at over $25 per hour on average."
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