Amazon reportedly withheld millions of tips from Amazon Flex drivers and the company is refunding most of the money following a lawsuit filed by the Federal Trade Commission (FTC).
The drivers were part of Amazon’s Flex business, which was founded in 2015 and allows people to deliver Amazon packages with their cars. Drivers are independent employees and are not employees of Amazon.
For orders placed on Prime Now and AmazonFresh, drivers are able to make deliveries.
According to one, more than 140,000 Amazon Flex drivers will receive a portion of a $60 million deal with Amazon FTC news release. The money will serve as reimbursement from tips that were reportedly illegally withheld by Amazon from drivers between 2016 and 2019.
FILE – Amazon Flex logo on smartphone. (Tiffany Hagler-Gierd/Businesshala via Getty Images)
In 2021, the FTC filed a lawsuit against Amazon and its subsidiary, Amazon Logistics, alleging that “the company failed to fully pay for tips earned by drivers in its Amazon Flex program,” the news release continued. .
The complaint alleges that the company stopped withholding drivers’ tips only after it became aware of the FTC’s investigation in 2019, according to the agency.
Amazon Flex drivers get paid between $18 and $25 per hour, Amazon Flex FAQ Website, and 100% of the tips go to the drivers minimum income.
But in 2016, Amazon began paying drivers a lower hourly rate and used tips to make up the difference, according to the complaint. Amazon did not disclose the changes to the drivers, the FTC said, and the amount of tips it took from drivers was $61.7 million.
According to the FTC, Amazon agreed to settle in February and will pay drivers back via check and PayPal payments. Drivers receiving check reimbursement must submit it by January 7, 2022.
The news release states, “Drivers who had more than $5 withheld by Amazon will receive the full amount of their withheld tips. The highest amount that can go to an Amazon Flex driver is more than $28,000, While the average amount is $422.”
Additionally, the settlement prevents Amazon from misrepresenting any driver’s expected income or hourly wage, how much they will receive as a tip and whether the amount paid by the customer is a tip.
“The highest amount that can go to an Amazon Flex driver is more than $28,000, while the average amount is $422,” the FTC said.
“While we disagree that the historical manner in which we reported payments to drivers was unclear, we added additional clarity in 2019 and are pleased to have the matter behind us. Amazon Flex Delivery Partner They play a vital role in serving customers every day, which is why they earn “one of the best in the industry, averaging over $25 per hour nationwide,” an Amazon spokesperson told Businesshala TV stations.
This story was reported outside of Los Angeles.