Amazon (Photo by David Ryder/Getty Images)
#Roommates, Amazon may be one of the largest and most profitable companies in the world—but a recent federal ruling declared that the company must part with over $60 million. Following the outcome of a recent probe by the U.S. Federal Trade Commission (FTC), Amazon has been ordered to pay millions to flex workers who accused the company of stealing their wages.
@Complex reports, Amazon has to officially pay $61.7 million to flex workers following the outcome of a Federal Trade Commission investigation surrounding accusations that they stole tips from company drivers. The amount equals the tips that Amazon allegedly retained during a two-and-a-half year period where Amazon Flex was using its base pay system. “In total, Amazon stole nearly one-third of drivers’ tips to pad its own bottom line,” FTC commissioner Rohit Chopra said in a statement, charging Amazon with “expanding its business empire by cheating its workers.”
According to the FTC, Amazon hired thousands of drivers and promised them large base wages and room to earn hefty tips. Unfortunately, the company instead used the worker’s tips to pay the base wages—meaning that workers never received the tips that they earned, which Amazon promised would be $18 to $25. Additionally, some of the tips went directly to the company instead of workers, who were never told their tips would sometimes pay their base wages.
“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.”
The company ended its base pay system back in August 2019 after learning about the FTC’s investigation three months earlier. “By the time this scheme was exposed in late 2019, Amazon Flex was far more established,” wrote Chopra. “This conduct raises serious questions about how Amazon amassed and wielded its market power.”
Amazon Flex was launched in 2017, using drivers’ tips to pay their base salaries. The pay system became widely criticized two years later, with the company initially advocating for the practice by claiming that drivers still got 100 percent of their tips, even when the tips replaced base pay.
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