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FTC: Amazon to Pay Back Delivery Drivers $61.7 Million It Skimmed In Tips

(The AEGIS Alliance) – In a Tuesday press release, the Federal Trade Commission (FTC) announced the settling of charges it levied against online retail giant Amazon that alleged the corporation had skimmed $61.7 million worth of tips that were meant to go directly into the pockets of its contractor delivery drivers. The fitting fine is for the full amount and “will be used by the FTC to compensate drivers.”

Amazon Flex was launched in 2015. The premise was that Flex drivers could use their own automobiles to deliver merchandise ordered from numerous providers, together with Amazon Fresh and Prime Now while earning an advertised rate of $18-$25 per hour. For certain kinds of deliveries, customers are also able to tip their drivers. From the beginning, Amazon promised customers and drivers both that the full amount of the tips all goes to the drivers.

In actuality, beginning in late 2016, the FTC alleged that Amazon shifted Flex drivers to a lower hourly rate after which used customer tips to make up the difference. This would’ve been one thing if Amazon had then disclosed the change to the drivers and clients. But, in line with the FTC, not only did Amazon fail to notify drivers, it deliberately took steps to cover up the change from drivers themselves while promising everybody that sure, drivers had been nonetheless receiving 100% of the tips.

In the FTC’s preliminary complaint, it noted that Amazon workers had been aware this was a colossal mistake, internally characterizing the move as an “Amazon reputation tinderbox” and a “huge PR risk.” Nothing changed until August of 2019 when the FTC alleged Amazon was aware of its investigation. DoorDash was caught in a tip-skimming scandal as well, it’s possible that Amazon thought it was a good idea to return to the previous model, where drivers were paid what they had been promised. At that point, Amazon announced it will no longer use customer tips to pad out wages and adjusted the Flex app to incorporate a breakdown of earnings for drivers.

In total, Amazon is required to pay out $61,710,583 that the FTC says is the total amount that it believes Amazon stole from drivers. As for where that cash goes, the FTC says it’ll be used to refund Flex drivers. (Drivers can join email updates regarding the refund process right here.) On top of repaying drivers, the FTC ordered that Amazon will be barred from misrepresenting drivers’ wages such as what the expected payment will be, how much of order tips they’re entitled to, and what portion of a buyer’s cost is derived from a tip. The corporation is also prohibited from utilizing tips to pad wages until it first informs drivers of changes and acquires their consent.

It just goes to show: Don’t steal the worker’s tips. Also, do not lie about stealing tips. Just don’t be a prick, basically. But unfortunately, with this being Amazon, I’m certain this is not the last labor violation we will be hearing about.

An Amazon Supplier is violating China Labor Laws, From Wages To Food, and Amazon admits it. The company may have violated labor laws when it fired employees, allegedly because the workers were protesting, and one of those employees has sued Amazon. Amazon also keeps finding ways to screw over its warehouse and Whole Foods workers, such as surveilling them and making efforts to prevent them from unionizing.

Amazon did raise its company minimum wage to $15 an hour, but only after a lot of political pressure, then in the fine print, Amazon actually made cuts to production bonuses and employee stock benefits. Amazon had even allegedly forced some workers to pee in water bottles, and there are cases of employees being injured on the job, then losing their jobs, and soon became homeless.

Kyle James Lee – The AEGIS Alliance – This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Kyle James Lee

Majority Owner of The AEGIS Alliance. I studied in college for Media Arts, Game Development. Talents include Writer/Article Writer, Graphic Design, Photoshop, Web Design and Development, Video Production, Social Media, and eCommerce.

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