• By The Financial District


The Federal Trade Commission (FTC) announced that it will be fining Amazon $61.7 million for using drivers’ tips to pay their salary for more than two-and-a-half years, Sharon Zhang reported for Truthout.

“Today, the FTC is sanctioning Amazon.com for expanding its business empire by cheating its workers,” said FTC Commissioner Rohit Chopra in a statement. “The Commission’s complaint charges that the company secretly began cutting its payments to drivers, and siphoning their tips to make up the difference.

In total, Amazon stole nearly one-third of drivers’ tips to pad its own bottom line.”

The FTC has ordered that the $61.7 million go back to the workers who were shorted pay.

The drivers were employed through Amazon’s Flex service, a package delivery service that was meant to compete with FedEx and UPS in 2015.

The workers, who are contractors and not employees, were sold a job with competitive pay: Amazon promised to pay them $18 to $25 an hour, plus 100 percent of the tips that they received. But instead, Amazon used the tips to pay the drivers their base pay, shorting them of tips in order to save themselves millions.

Chopra called the scheme a “bait-and-switch” in which Amazon recruited enough workers to drive for the holiday season, pocketed the tips and then kept the drivers from seeking other employment by misleading them about the pay.

The company evidently stopped the practice after reporters uncovered the scheme. In 2019, the L.A. Times printed one driver’s account of the tip shorting.

“In one case, a driver who was assigned to deliver an order to his own home tipped himself $12,” wrote Johana Bhuiyan of the LA Times. The guaranteed minimum base pay for the order was $27. The driver received $30 in compensation for the order, which the company said included 100 percent of the tip — showing that Amazon contributed only $18.”