Amazon Flex drivers to receive payments in $61 million tip settlement
Checks and PayPal payments are going out to more than 140,000 drivers whose tips were allegedly withheld. Amazon settled the case with the FTC in February.
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Amazon Flex drivers are contractors who use their own vehicles to deliver customer orders for the Amazon Fresh and Prime Now services.
Amazon has relinquished more than $61 million to settle claims by the Federal Trade Commission that it withheld tips from over 140,000 of it Amazon Flex drivers for more than two years. And now the agency is sending the settlement money to the drivers, the FTC announced Tuesday.
The FTC alleged in a lawsuit it filed earlier this year that Amazon had secretly withheld some tips from drivers starting in 2016 and only stopped the practice in 2019 when it learned of the FTC investigation.
"The highest amount going to a single Amazon Flex driver is more than $28,000, while the average amount is $422," the FTC said.
Amazon Flex drivers are contractors who use their own vehicles to deliver groceries and other items for the Amazon Fresh and Prime Now services.
The FTC said in February that Amazon told both customers and drivers that the drivers would receive 100% of any tips paid. However, that practice ended in 2016, the FTC said. The change came when Amazon allegedly lowered the hourly pay for Amazon Flex drivers but didn't tell them, making up the difference with customer tips. Hundreds of drivers complained to Amazon when their earnings dropped, the FTC said.
Amazon has previously said it disagrees with the characterization that the company was unclear about how hourly pay and tips were paid and that it made the policy more clear in 2019. The company agreed to settle the FTC's lawsuit in February. Under the settlement, Amazon is prohibited from making any new changes to a driver's tips without first getting specific consent.
Amazon didn't immediately respond to a request for comment Tuesday.
On Tuesday, the FTC said the payments will go out as checks or via PayPal. The agency urged affected Amazon Flex drivers to deposit or cash their checks before Jan. 7, 2022, and said that drivers who receive more than $600 will receive federal tax forms to report the settlement money as income.