Amazon ‘illegally’ withheld $60m in driver tips

The Federal Trade Commission (FTC) has returned nearly $60 million to 140,000 drivers whose tips were “illegally withheld” by Amazon.

The US consumer watchdog said that the funds would serve as reimbursements for tips that Amazon allegedly illegally withheld from drivers between 2016 and 2019.

Earlier this year, the FTC brought a suit against Amazon and its subsidiary, Amazon Logistics, alleging that the company failed to fully pay tips that drivers in its Amazon Flex programme had earned.

Amazon Flex drivers deliver goods and groceries ordered through programmes like Prime Now and AmazonFresh.

The complaint alleged that the company secretly kept drivers’ tips over a two-and-a-half year period and only stopped the practice after becoming aware of the FTC’s investigation in 2019.

Amazon agreed to settle the case and surrender all the money it withheld from its drivers. The settlement also prohibits Amazon from misrepresenting any driver’s likely income or rate of pay, how much of their tips will be paid to them, as well as whether the amount paid by a customer is a tip.

Amazon also will be prohibited from making any changes to how a driver’s tips are used as compensation without the driver’s express informed consent.

Retail Systems has reached out to Amazon for comment.

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