Amazon to pay $61.7 million to Flex drivers after wage theft allegations
Amazon will pay $61.7 million to Flex drivers to settle allegations of stolen tips, after an extensive investigation by the US Federal Trade Commission. The figure represents the total amount of allegedly withheld tips over the two and a half years that Amazon Flex’s controversial base pay system was in place. Amazon also agreed to new restrictions on how it communicates wage information to drivers.
“In total, Amazon stole nearly one-third of drivers’ tips to pad its own bottom line,” FTC Commissioner Rohit Chopra said in a statement, accusing Amazon of “expanding its business empire by cheating its workers.”
Amazon rejected the idea that its pay structure had stolen wages, or was otherwise unclear. “While we disagree that the historical way we reported pay to drivers was unclear, we added additional clarity in 2019 and are pleased to put this matter behind us,” a company representative said.
Instituted in late 2016, the variable base pay system came under scrutiny after reporting by the Los Angeles Times’ in February 2019. Amazon initially defended the practice, saying drivers still received 100 percent of the tips sent by customers, even in instances when those tips displaced base pay that would otherwise have been provided by Amazon.
According to the FTC complaint, Amazon used this ambiguity to recruit drivers with promises of high base wages and the potential for significant tips — then pad its own bottom line by using tipped income to make up much of the paid base wage.
In hiring materials, workers were told they would keep 100% of their tips, and separately guaranteed a base wage between $18 and $25 per hour. The drivers were not informed that the tips would sometimes be used to reimburse the base wage, resulting in some of the tipped amount going to Amazon rather than the driver.
“Amazon received hundreds of complaints from drivers after enacting the change, as drivers became suspicious when their overall earnings decreased,” the commission said in its official statement. “Drivers who complained received form e-mails falsely claiming that Amazon was continuing to pay drivers 100 percent of tips.”
Amazon became aware of the FTC’s investigation in May of 2019, when the commission issued a civil investigative demand for records relating to the Flex program. Amazon discontinued the practice in August 2019. Amazon reported $11.6 billion in profits over the course of 2019, with the Flex program accounting for just a tiny portion of the company’s operations.
Notably, the settlement only includes the money that was withheld from drivers, as the FTC does not have legal authority to impose punitive fines on companies that break the law. But in a press conference announcing the settlement, FTC Commissioner Noah Phillips called on Congress to grant the commission greater enforcement powers so that it could institute more severe penalties in the future.
Amazon loses attempt to delay union vote at Alabama warehouse
Thousands of Amazon warehouse workers at an Alabama facility will be able to cast their votes on whether to unionize by mail-in ballots beginning next week after the National Labor Relations Board (NLRB) rejected Amazon’s latest attempt to stall the vote by pushing for it to be held in-person, despite the pandemic.
In a decision posted Friday, the NLRB denied Amazon’s motion filed in late January to review its earlier decision to hold the milestone vote for workers by mail. The NLRB said Amazon’s request “raises no substantial issues warranting review.”
Ballots are set to be mailed out Monday, February 8, and eligible workers at the Bessemer, Alabama facility will be able to vote over the course of nearly two months instead of through an in-person event, which may take place over one or several days.
“Once again Amazon workers have won another fight in their effort to win a union voice. Amazon’s blatant disregard for the health and safety of its own workforce was demonstrated yet again by its insistence for an in-person election in the middle of the pandemic,” said Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union (RWDSU), which is conducting the union drive, in a statement. “Today’s decision proves that it’s long past time that Amazon start respecting its own employees; and allow them to cast their votes without intimidation and interference.”
The union vote is a landmark moment for the Alabama facility and Amazon. While some Amazon workers are unionized in Europe, the company has so far fended off unions in the United States. A union election was held in 2014 at a Delaware warehouse, but resulted in workers largely rejecting the effort.
According to the NLRB, having a union at Amazon would give workers the right to collectively bargain over working conditions including items such as safety standards, training, breaks, pay, benefits, and other important issues that would make the workplace better.
Perhaps it’s a good thing Jeff Bezos will be stepping down this summer….
Special thanks to The Verge
