The Federal Trade Commission announced it is disbursing nearly $62 million to over 140,000 Amazon Flex drivers as reimbursement for tips that Amazon allegedly withheld from them between 2016 and 2019.
Amazon Flex drivers deliver goods and groceries ordered through programs such as Prime Now and AmazonFresh.
The FTC sued Amazon and its subsidiary, Amazon Logistics, in 2021, stating that the company secretly retained tips the drivers had received over a two-and-a-half-year period. In addition, the lawsuit alleged that Amazon only stopped this practice when it became aware that the FTC was investigating in 2019.
Amazon agreed to pay more than $61.7 million to settle the charges in February. As a result, the average payout will be $422 per driver, and the highest amount going to a single driver is more than $28,000.
According to the FTC’s complaint against Amazon and Amazon Logistics, the company regularly advertised that Flex drivers would earn $18–25 per hour. In addition, documents provided to these drivers featured statements such as, “You will receive 100% of the tips you earn while delivering with Amazon Flex.”
However, the FTC’s investigation showed that this was not the case.
“Rather than passing along 100% of customers’ tips to drivers, as it had promised to do, Amazon used the money itself,” Daniel Kaufman, acting director of the FTC’s Bureau of Consumer Protection, said in a statement in February. “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.”
Although Amazon did agree to the settlement, the company objects to the statement that it acted inappropriately.
“While we disagree that the historical way we reported pay to drivers was unclear,” an Amazon spokesperson told Insider, “we added additional clarity in 2019 and are pleased to put this matter behind us. Amazon Flex delivery partners play an important role in serving customers every day, which is why they earn among the best in the industry at over $25 per hour on average across the country.”
The FTC said it will send 139,507 checks and 1,621 PayPal payments to Amazon Flex drivers who were affected. Drivers who had more than $5 withheld by Amazon will receive the total amount of their withheld tips.
Drivers should receive their checks before Jan. 7, 2022.