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Amazon drivers will receive nearly $ 60 million in withheld tips

The FTC filed a lawsuit against Amazon and its subsidiary, Amazon Logistics, in 2021, alleging that the e-commerce company had failed to pay tips to drivers in its Amazon Flex program.

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This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.
This story originally appeared on The Epoch Times

By Katabella Roberts

Depositphotos.com

More than 140,000 Amazon drivers will receive nearly $ 60 million in withheld tips after the company settled with the US Federal Trade Commission (FTC) on Tuesday.

The funds will serve as reimbursement for tips that Amazon allegedly illegally withheld from drivers for a two-and-a-half-year period between 2016 and 2019, the FTC said in a statement.

The FTC filed a lawsuit against Amazon and its subsidiary, Amazon Logistics, in 2021, alleging that the e-commerce company had failed to pay tips to drivers in its Amazon Flex program.

Drivers in the Amazon Flex program use their own vehicle to deliver packages and groceries ordered through programs like Prime Now and AmazonFresh, allowing customers to tip drivers.

The lawsuit claimed that the company regularly advertised that program drivers could earn between $ 18 and $ 25 an hour for delivering products to customers and that Amazon was telling drivers that they would receive 100 percent of the tips they earned while making deliveries. with Amazon Flex.

Amazon also told its customers that 100 percent of the tips would go to drivers as well, the FTC said.

However, the FTC in its lawsuit claimed that Amazon had been practicing a tip theft scheme and had kept drivers' tips for a period of two and a half years, only stopping its behavior after it became aware of the tip. FTC investigation in 2019.

The FTC lawsuit claims that in late 2016, Amazon began paying drivers in its Flex program a lower hourly rate, without consulting their drivers first. It then used customer tips to make up the difference between the new lower hourly rate and the promised rate, resulting in more than $ 61.7 million in tips missing from drivers' pockets, the FTC said.

Amazon reportedly received hundreds of complaints from drivers for missing tips and unreported payment change, but returned the complaints with emails in the form of a "false claim that Amazon was still paying drivers 100 percent of the tips, "the FTC said.

However, he continued to practice the tip theft scheme until August 2019, when the FTC notified him of its investigation into the company. It then began using a pay model to reward drivers with an identified base amount plus 100 percent of tips and provided its drivers with a breakdown of both their pay and tips.

The Epoch Times has contacted Amazon for comment.

Amazon settled with the FTC in February, agreeing to pay a total of $ 61,710,583, which represents the total amount Amazon allegedly withheld from drivers.

The FTC said the settlement also "prohibits Amazon from misrepresenting any driver's likely earnings or rate of pay, how much of their tips they will be paid, as well as whether the amount paid by a customer is a tip."

Amazon will now not be able to make any changes to how its drivers' tips are used as compensation without first consulting the driver and obtaining their full consent.

Daniel Kaufman, acting director of the FTC's Office of Consumer Protection, praised the deal Tuesday.

"Instead of passing 100 percent of customer tips to drivers, as promised, Amazon used the money itself," Kaufman said. "Our action today returns to drivers tens of millions of dollars in tips that Amazon misappropriated, and requires Amazon to obtain drivers' permission before changing the tipping treatment in the future."

The FTC will send 139,507 checks and 1,621 PayPal payments to Amazon Flex drivers, while those drivers who had tips totaling more than $ 5 withheld by Amazon will receive the full amount of tips withheld. The average amount drivers will receive is $ 422 and the highest amount for a single Amazon Flex driver is more than $ 28,000, Reuters reported .

The Epoch Times

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