On February 2, 2021, the Federal Trade Commission (FTC) announced that it had settled a case against Amazon relating to the company’s failure to pay its Flex delivery drivers the full value of the tips paid to them by customers.
Per the terms of the agreement, Amazon will pay more than $61.7 million in restitution to the Flex drivers for their wrongfully withheld tips:
“Rather than passing along 100 percent of customers’ tips to drivers, as it had promised to do, Amazon used the money itself,” said Daniel Kaufman, Acting Director of the FTC’s Bureau of Consumer Protection. “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.”
According to the FTC, Amazon withheld the Flex drivers’ tips over a period of about two-and-a-half years, starting in late 2016. At that time, Amazon shifted from paying drivers between $18 and $25 per hour plus the full amount of any customer tips to paying drivers a lower hourly rate. Amazon used drivers’ tips to make up the difference between the new lower hourly rate and the promised rate. Amazon did not disclose this change in pay practices to its Flex drivers.
Unfortunately, Amazon’s actions are simply another incident in a long line of employers misappropriating or outright stealing their employees’ tips.
Such practices – commonly referred to as “wage theft” – are rampant in the customer service industry, where employees are often paid sub-minimum wage rates and depend on their tips for the bulk of their income.
Our team at Fair Work P.C. has a long history of pursuing legal action against employers who improperly retain tips that are owed to their employees. If you work in a tipped occupation and believe you are not getting all the tips you are owed, give us a call. We’ll see if we can help.