Amazon
Also known as: Amazon Flex.
The FTC alleged that Amazon withheld $61,710,583 in customer tips from Amazon Flex drivers after changing its pay model. A final administrative consent order required Amazon to pay that amount for driver compensation.
Resolved. Refunded, settled, ceased operating, or the claim did not hold up. Kept for the record.
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- Registrations
- In the Matter of Amazon and Amazon Logistics (FTC administrative proceeding, 2021)
- Jurisdictions
- United States (federal)
The FTC alleged Amazon withheld driver tips
Amazon Flex offered delivery work to drivers classified by Amazon as independent contractors. Amazon advertised pay of $18 to $25 per hour and told drivers, “You will receive 100% of the tips you earn while delivering with Amazon Flex.” Customers were also told their tips would go to drivers.
The FTC alleged that in late 2016 Amazon lowered its hourly contribution and used customer tips to make up the difference between the lower rate and the promised rate. According to the complaint, Amazon did not disclose that change, continued to promise full tip payment, and sent form emails to drivers who complained. The FTC said drivers were shorted $61,710,583 over two and a half years. Amazon returned to a model with an identified base amount plus all tips in August 2019, after receiving notice of the FTC investigation.
A proposed settlement required Amazon to pay $61,710,583 for compensation to Flex drivers. The FTC approved the final administrative consent order in June 2021. The order also bars misrepresentations about likely income, pay rates, and tips, and requires express informed consent before Amazon changes how tips are used as compensation.
What is not established
The documents describe the FTC’s allegations and a consent order. They do not describe findings reached after a trial.
Sources
Every claim above rests on one of these. Open them and check.
- Enforcement action February 2, 2021
- Enforcement action June 10, 2021
- Enforcement action November 2, 2021
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First recorded February 2, 2021 · Last updated November 2, 2021