FTC Gives Amazon Drivers Over $60 Million in Withheld Tips The withholding, the FTC said, was illegal.
By Entrepreneur Staff Edited by Emily Rella
The Federal Trade Commission announced Tuesday that over 140,000 Amazon Flex drivers will receive more than $60 million in tips that were withheld by their employer between 2016 and 2019. The withholding, the FTC said, was illegal.
Amazon Flex drivers deliver the goods ordered through programs like Prime Now and Amazon Fresh. The FTC sued Amazon and Amazon Logistics earlier this year on their behalf, accusing the company of failing to pay the tips that those drivers had earned.
In its release Tuesday, the commission also alleged that Amazon secretly kept the tips over a two-and-a-half year period, only stopping after becoming aware that the FTC was investigating in 2019.
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As the FTC pointed out, Amazon agreed to settle the case, surrender all the withheld money and never misrepresent a driver's likely income or rate of pay.
Amazon will be prohibited from making changes to how a driver's tips are used as compensation without that driver's informed consent.
In all, the FTC will send 139,507 checks and 1,621 PayPal payments to drivers. Those who had more than $5 withheld will receive the full amount of their withheld tips.
The FTC noted that the highest amount going to a driver is over $28,000 but the average amount is $422. Over 19,000 will be receiving more than $600 and will need to report the income on their tax return.
