Amazon will pay a $61.7 million fine to settle allegations the company had failed to properly pay out tips to its Flex delivery drivers, the Federal Trade Commission (FTC) announced on Tuesday. The fine stems from a payment change the company implemented in late 2016. At the time, Amazon said Flex drivers, which use their own cars to deliver packages and groceries for Prime Now and Whole Foods, could earn $18 to $25 per hour, plus tips for their work. That same year, it put into place a new payment policy, which the FTC says Amazon did not properly disclose to drivers, that saw it pay Flex drivers a lower hourly rate. Over a timeframe of two-and-a-half years, it used the tips they earned to make up the difference between the rate it had promised and the one it was actually paying out.
According to the agency, not only did Amazon “intentionally” fail to notify drivers of its policy changes, it actively took steps to obscure them as well and used the tips drivers earned. The entire time it also continued to advertise Flex drivers could earn tips and $18 to $25 per hour. The company only went back to the previous payment model after it became aware of the FTC’s investigation in 2019.