Amazon settles FTC charge over withheld tips for $61.7M News
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Amazon settles FTC charge over withheld tips for $61.7M

The US Federal Trade Commission (FTC) announced Tuesday that Amazon has agreed to settle charges that it withheld driver tips for $61.7 million.

With Amazon Flex, independent workers use their own vehicles to deliver packages for Amazon. The FTC charged in an administrative complaint against Amazon and its subsidiary, Amazon Logistics, that Amazon failed to pay Amazon Flex drivers the full amount of tips they received from customers over two-and-a-half years. The FTC alleged that Amazon only stopped withholding the money after it became aware of the FTC’s investigation in 2019.

In the complaint, the FTC alleged that Amazon regularly advertised that Amazon Flex drivers would be paid $18-25 per hour for making deliveries. However, Amazon allegedly changed the rate to a lower hourly rate without disclosing the change to drivers. Amazon used customer tips to make up the difference between the lower hourly rate and the promised rate, which led hundreds of drivers to complain to Amazon.

The FTC began to investigate Amazon, concluding that the company allegedly withheld $61.7 million from drivers. This is also the amount that Amazon agreed to pay back in the settlement.

The FTC will use the $61.7 million to compensate the drivers. Additionally, Amazon will be prohibited from misrepresenting any driver’s pay, and from making any changes to how a driver’s tips are used without first obtaining the driver’s express informed consent.

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