Amazon was recently accused of significantly shorting its essential workers on tips and has now agreed to settle these claims for over $60 million. The Federal Trade Commission (“FTC”), a federal agency with a dual mission to protect consumers and promote competition in our dynamic economy, filed a complaint against the online retailer in late 2019 after numerous complaints from workers. The complaint alleged Amazon had several policies in place dating back to 2015 that misled workers in the Amazon Flex, AmazonFresh, and Prime Now programs into believing they would be receiving a significantly higher minimum wage as well as tips.
These drivers claimed that they were baited into the Flex programs that promised pay at $18-25 per hour plus tips but by late 2016 the company has changed its tune. Amazon had allegedly begun secretly reducing its pay to drivers as well as retaining their tips. The drivers began to make formal complaints to the online retailer who assured them and their customers that 100 percent of gratuities were going to drivers when they in fact were not. It wasn’t until late 2019 that this scheme was exposed and dropped after the FTC began their investigation. By this point, the drivers alleged the damage had been done to workers who had flocked to these Flex programs from other competitors with promises of better pay. The $61.7 million payout will be distributed to drivers who had their tips misappropriated by the online retailer for more than two years. Additionally, Amazon will have to be more transparent with its workers regarding their rate of pay, including what percentage of tips they’ll be receiving from customers going forward.
Delivery drivers often face several forms of wage violations. From unpaid tips to unpaid overtime, the amount of hard-earned money wrongfully taken from these essential workers is far from uncommon. However, many states, including New York, already have laws on the books that make it illegal for owners of a company to keep tips meant for its workers. Other laws relating to the payment of wages give protection to workers – but can be complicated. Amazon currently has an additional wage case pending that alleges they misclassified drivers in New Jersey as independent contractors failing to pay them overtime when working over 40 hours per week. If you are an essential worker making deliveries and have questions or concerns regarding your pay structure, it may be a good idea to speak to an employment attorney to see if you may have claim for owed wages. Our firm, Fitapelli & Schaffer, LLP, specializes in workers’ rights and offers a free and confidential phone consultation. Call us now at (212) 300-0375 or visit our website here for additional information.