Finally, Amazon Set To Pay $61.7m Settlement Fee

Amazon is expected to pay more than $61.7 million to settle Federal Trade Commission charges that it didn’t pay its Amazon Flex drivers the full amount of tips owed to them, the agency has said.

The FTC said the money represents the “full amount that Amazon allegedly withheld from drivers” over a two-and-a-half-year period.

The government agency said Amazon, “stopped its behaviour only after becoming aware of the FTC’s investigation in 2019.”

The FTC said it’ll distribute the funds to “compensate drivers,” and those impacted can sign up for updates from the agency.

Per the FTC’s complaint against Amazon and its Amazon Logistics subsidiary, the e-commerce giant “regularly advertised that drivers participating in the Flex program would be paid $18-25 per hour for their work making deliveries to customers” and also told drivers that they would, “receive 100 per cent of the tips you earn while delivering with Amazon Flex.”

Amazon Flex drivers deliver products for the company’s Prime Now and Fresh services. In addition to telling drivers that they would receive 100 per cent of their tips, the FTC says that “Amazon also assured its customers that 100 per cent of any tips they paid would go to the driver.”

In late 2016 Amazon moved away from the $18-$25 hourly rate plus tips to a lower rate, according to the FTC release, and did not tell drivers of the change. The FTC alleges that Amazon then “used the customer tips to make up the difference between the new lower hourly rate and the promised rate,” which led to drivers “being shorted more than $61.7 million in tips.”