Amazon to Pay $61.7M FTC Settlement for Stiffing Drivers on Tips

E-commerce giant Amazon will reportedly pay $61.7 million to settle allegations by the FTC that the company failed to pay Flex delivery drivers the full amount of tips given to them by customers. An FTC official commented: “Rather than passing along 100% of customers’ tips to drivers, as it had promised to do, Amazon used the money itself. 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.”

NBC News reports that Amazon will pay a $61.7 million settlement over allegations by the FTC that it failed to pay Flex delivery drivers the full amount of tips that they were owed. The commission voted 4-0 in favor of the settlement.

The FTC alleges that in 2016 Amazon shifted from paying divers the promised rate of $18 to $25 per hour, plus tips, to paying a much lower hourly rate. Amazon allegedly “intentionally failed” to notify drivers of the change and used tips received from customers to make up the difference between the original promised rate and the lower hourly rate.

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

An Amazon spokesperson told CNBC that the company disagrees with the FTC’s claims that the driver payment model was unclear, stating: “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. 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.”

Amazon will pay more than $61.7 million to the FTC which will be used by the agency to compensate Flex drivers. The settlement further prohibits Amazon from misrepresenting any driver’s likely income or rate of pay, how much of their tips they will receive, and whether the amount paid by a customer is a tip.

Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address [email protected]

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