According to the Federal Trade Commission, more than 140,000 Amazon drivers are receiving roughly $60 million in tips that were previously withheld by the corporation.
The funds “will serve as reimbursement for tips that Amazon allegedly illegally withheld from drivers between 2016 and 2019,” the Federal Trade Commission announced on Tuesday.
According to the announcement, the FTC filed a lawsuit against Amazon and Amazon Logistics, the business’s delivery service, earlier this year, saying that the company had not paid the entire amount of gratuities received by drivers while participating in the Amazon Flex programme.
Amazon Flex allows drivers to deliver products in their own vehicles.
“The complaint alleged that the company secretly kept drivers’ tips over a two-and-a-half year period and only stopped the practice after becoming aware of the FTC’s investigation in 2019,” per the FTC.
According to the FTC, a total of 139,507 checks and 1,621 PayPal payments will now be paid to Amazon Flex drivers. All drivers who have had more than $5 deducted from their pay will be reimbursed in full.
According to the FTC, the average check amount is $422, with the largest payout exceeding $28,000.
“People who receive checks should deposit or cash them before January 7, 2022, as indicated on the check,” the FTC said.
An Amazon spokesperson tells PEOPLE in a statement, “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.”
According to the FTC’s administrative complaint, Amazon “regularly advertised” that Amazon Flex drivers would be paid $18-25 per hour and would be able to keep 100 percent of any tips they earned.
In an earlier statement, the FTC claimed that beginning in late 2016, Amazon “shifted from paying drivers the promised rate of $18-25 per hour plus the full amount of customer tips to paying drivers a lower hourly rate.”
Instead, according to the FTC, the corporation took customer tips “to make up the difference between the new lower hourly rate and the promised rate.”
“Rather than passing along 100 percent of customers’ tips to drivers, as it had promised to do, Amazon used the money itself,” Daniel Kaufman, Acting Director of the FTC’s Bureau of Consumer Protection, said in a statement at the time. “Our action today returns to drivers the tens of millions of dollars in tips that Amazon misappropriated, and requires Amazon to get drivers’ permission before changing its treatment of tips in the future.”
The agreement also forbids Amazon from misrepresenting the amount of money that drivers are likely to be paid, as well as making future changes to how tips are handled without the drivers’ consent.
