FTC’s Amazon settlement sends a $60 million message to businesses: Honor your promises to gig workers

The FTC just sent almost $60 million in checks and PayPal payments to eligible drivers who had their tips illegally taken by Amazon. Our advice to Amazon Flex drivers: Watch your mailbox for a check. Our advice to companies that hire gig workers: Watch what you say to workers and customers – and live up to your claims.

When customers placed orders through Amazon’s Prime Now or AmazonFresh services, Amazon asked “How much do you want to tip the courier?” Amazon told customers and drivers that “100% of tips are passed on to your courier.” But as the FTC alleged in its complaint, from late 2016 through August 2019, Amazon illegally pocketed a substantial percentage of tips that customers expressly earmarked for drivers.

The FTC just sent 139,507 checks totaling $59,428,878 and 1,621 PayPal payments totaling $171,715 to Amazon Flex drivers. Drivers who had $5 or more illegally taken by Amazon will get 100% of their tips returned to them. The highest award amount is $28,255 with an average of $422.

Do you or your employees have friends or family who have been Amazon Flex drivers? Tell them to visit www.ftc.gov/AmazonFlex for more information.

For companies that hire gig workers, remember that established consumer protection principles apply. Make sure you can substantiate what you say in your ads and promotional materials. That includes representations to workers about earnings and claims to customers about your tipping policies.