Amazon must pay $61.7m for withholding driver tips

Amazon has been ordered to pay $61.7 million for failing to pay its drivers their full tips.

The Federal Trade Commission (FTC), which issued the order, said that over a two and a half year period Amazon Flex drivers did not receive full tips given by customers.

Amazon Flex is a programme in which drivers, classified by Amazon as independent contractors, can agree to make deliveries using their personal vehicles.

Flex drivers deliver goods and groceries ordered through the Prime Now and AmazonFresh programmes, which allow customers to give the drivers a tip.

Amazon Logistics adverts, along with many other documents given to Flex drivers, say that drivers “receive 100 per cent of the tips” they earn whilst delivering with the company.

The FTC alleges that in late 2016 Amazon shifted from paying drivers the promised rate of $18–25 per hour plus the full amount of customer tips to paying drivers a lower hourly rate, a shift that it did not disclose to drivers.

It said that the retail giant used the customer tips to make up the difference between the new lower hourly rate and the promised rate.

According to the commission, this resulted in drivers’ being shorted more than $61.7 million in tips.

The FTC said that the company stopped its behaviour only after becoming aware of its investigation in 2019.

“Rather than passing along 100 percent of customers’ tips to drivers, as it had promised to do, Amazon used the money itself,” said Daniel Kaufman, acting director of the FTC’s Bureau of Consumer Protection. “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.”

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