The Federal Trade Commission (FTC) announced that it was sending checks totaling around $60 million to drivers who had their tips illegally taken by Amazon.
Earlier this year, Amazon agreed to settle allegations from the FTC that it failed to pay Amazon Flex drivers the full amount of the tips customers gave them from 2016 to 2019.
The agency alleged that Amazon and its Amazon Logistics subsidiary advertised that Flex drivers would be paid $18-$25 an hour and would “receive 100% of the tips you earn while delivering.” Flex drivers can use their own vehicles to make deliveries for the retail giant.
However, the FTC alleged, in late 2016 Amazon started paying Flex drivers less than the advertised $18-$25 rate and used tips given to drivers by customers to fill in the gap between the new hourly rate and the one that was promised. The FTC said this resulted in drivers having $61.7 million in tips being stolen. Customers had the option to tip their drivers when they used Amazon’s Prime Now or Amazon Fresh services, the FTC said.
On Tuesday, the FTC said it sent nearly 140,000 checks, totaling $59,428,878 and 1,621 PayPal payments totaling $171,715, to Amazon Flex drivers. The highest amount to be given to a driver was $28,255, with the average amount being $422.
In a blog post about the payments, the agency said the payments should serve as a warning to companies employing gig workers.
“Our advice to Amazon Flex drivers: Watch your mailbox for a check. Our advice to companies that hire gig workers: Watch what you say to workers and customers—and live up to your claims,” the blog post reads, later adding: “For companies that hire gig workers, remember that established consumer protection principles apply. Make sure you can substantiate what you say in your ads and promotional materials. That includes representations to workers about earnings and claims to customers about your tipping policies.”
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*First Published: Nov 3, 2021, 9:32 am CDT
Andrew Wyrich is the deputy tech editor at the Daily Dot. Andrew has written for USA Today, NorthJersey.com, and other newspapers and websites. His work has been recognized by the Society of the Silurians, Investigative Reporters & Editors (IRE), and the Society of Professional Journalists (SPJ).