Amazon Forced to Pay Back $60 Million in Illegally Withheld Tips to More Than 140,000 Drivers
The Federal Trade Commission (FTC) will send roughly $60 million to more than 140,000 Amazon drivers as reimbursement for tips the company illegally withheld between 2016 and 2019.
The FTC sued Amazon and its subsidiary Amazon Logistics earlier this year, claiming that the tech giant had failed to pay tips earned by drivers in its Amazon Flex program.
“Amazon will pay more than $61.7 million to settle Federal Trade Commission charges that it failed to pay Amazon Flex drivers the full amount of tips they received from Amazon customers over a two and a half year period,” the agency announced Tuesday. “The FTC’s complaint alleges that the company stopped its behavior only after becoming aware of the FTC’s investigation in 2019.”
The FTC took issue with Amazon’s advertising for drivers in their Flex program, which includes Prime Now and Amazon Fresh, noting that drivers were promised a salary of $18–25 along with 100 percent of the tips earned while delivering.
“Rather than passing along 100 percent of customers’ tips to drivers, as it had promised to do, Amazon used the money itself,” said Daniel Kaufman, Acting Director of the FTC’s Bureau of Consumer Protection. “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.”
In February of this year, Amazon agreed to settle the case and pay the full amount owed, which hit a total of $61.7 million.
The FTC has now vowed to send 39,507 checks and 1,621 PayPal payments to the owed Amazon Flex drivers, as any driver who had more than $5 withheld by Amazon will receive the full amount back.
