Amazon to pay $61.7M to settle FTC fees it withheld ideas from Flex drivers

Amazon to pay $61.7M to settle FTC fees it withheld ideas from Flex drivers


Drivers for Amazon Prime Now and Recent could have had some ideas withheld by the e-commerce big. 

Sarah Tew/CNET

Amazon pays greater than $61.7 million to settle Federal Commerce Fee fees that it did not pay its Amazon Flex drivers the complete quantity of ideas owed to them, the company stated on Tuesday. The FTC says that cash represents the “full quantity that Amazon allegedly withheld from drivers” over a two-and-a-half-year interval. The federal government company says that Amazon “stopped its conduct solely after changing into conscious of the FTC’s investigation in 2019.” 

The FTC stated it will distribute the funds to “compensate drivers,” and people impacted can join updates from the company

Per the FTC’s criticism towards Amazon and its Amazon Logistics subsidiary, the e-commerce big “repeatedly marketed that drivers taking part within the Flex program can be paid $18-25 per hour for his or her work making deliveries to prospects” and in addition instructed drivers that they might “obtain 100% of the ideas you earn whereas delivering with Amazon Flex.”

Amazon Flex drivers ship merchandise for the corporate’s Prime Now and Recent providers. Along with telling drivers that they might obtain 100% of their ideas, the FTC says that “Amazon additionally assured its prospects that 100% of any ideas they paid would go to the driving force.”

In late 2016 Amazon moved away from the $18-$25 hourly charge plus tricks to a decrease charge, in response to the FTC launch, and didn’t inform drivers of the change. The FTC alleges that Amazon then “used the client tricks to make up the distinction between the brand new decrease hourly charge and the promised charge,” which led to drivers “being shorted greater than $61.7 million in ideas.”

The FTC says that Amazon stopped utilizing that mannequin in August 2019 “after the corporate acquired discover of the FTC’s investigation.” It then returned to a mannequin the place drivers get an “recognized” base pay “plus 100% of ideas.”

“Whereas we disagree that the historic means we reported pay to drivers was unclear, we added extra readability in 2019 and are happy to place this matter behind us,” an Amazon spokesperson stated in a press release. “Amazon Flex supply companions play an necessary position in serving prospects daily, which is why they earn among the many greatest within the business at over $25 per hour on common.” 

Learn extraGoogle settles with Labor Division over alleged hiring and pay discrimination

As a part of the settlement, the FTC says Amazon pays $61,710,583 and is prohibited from “misrepresenting any driver’s possible revenue or charge of pay, how a lot of their ideas will likely be paid to them, in addition to whether or not the quantity paid by a buyer is a tip.” The corporate additionally will want a driver’s “categorical knowledgeable consent” if it needs to alter the construction to utilizing driver ideas as a part of compensation.

On a single day final 12 months, Amazon CEO Jeff Bezos added $13 billion to his web price. He has since been overtaken because the world’s richest man by Tesla CEO Elon Musk.

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