The Federal Trade Commission (FTC) announced on Tuesday that Amazon will pay a $ 61.7 million fine for not paying the allegations that the company did not pay out properly, tips to its Flex delivery managers. The fine stems from a payment change the company implemented at the end of 2016. At the time, Amazon said Flex drivers, who use their own cars to deliver packages and groceries for Prime Now and Whole Foods, could earn between $ 18 and $ 25 an hour, plus tips for their work. In the same year, a new payment policy was introduced, which according to the FTC did not properly disclose Amazon to managers, which resulted in Flex managers paying a lower hourly rate. Over a period of two and a half years, the tips they earned used to make the difference between the rate it promised and the interest rate.
According to the agency, Amazon not only “deliberately” failed to notify managers of its policy changes, but also took active steps to obscure them and use the tips that managers deserved. All the while advertising has continued, Flex executives can earn tips and pay $ 18 to $ 25 an hour. The company only returned to the previous payment model after taking note in 2019 of the FTC investigation.
“While we do not agree that the historical way in which we paid the drivers was unclear, we added additional clarity in 2019 and are pleased that we can put this matter behind us,” a Amazon spokesman said. CNBC.
Amazon is paying the $ 61.7 million fine to the FTC, which will use the money to compensate drivers. The agency says the fine represents the full amount of money drivers shorted between 2016 and 2019. As part of the settlement, the FTC also prohibits Amazon from misrepresenting how it will compensate drivers in the future. The company also cannot make a change in the remuneration of someone’s remuneration without first obtaining permission.
This is not the first time a tech company has been in the news about the wrong handling of tips. In 2019, it appeared that DoorDash sometimes reduced its payout to delivery workers when a customer paid a fee. After public backlash, DoorDash changed its earnings policy to give drivers 100 percent of all their tips.