Amazon Settles Drivers’ Wage Theft Charge For $61.7 Million

Amazon Settles Drivers’ Wage Theft Charge For $61.7 Million

| Feb 10, 2021 | Employment Contracts |

By many accounts, wage theft is among the most common crimes in the United States. The theft of wages comes in many forms. Most often, we see wage theft in the misclassification of employees as independent contractors or as exempt from the Fair Labor Standards Act (FLSA). This results in denied overtime, sub-minimum wages or failure to pay workers for all hours worked.

Other common forms of wage theft include refusing to give a worker their last paycheck after termination, requiring non-paid work, failure to pay a required prevailing wage or simply not paying workers at all for time they have worked.

Wage theft disproportionately affects low-wage workers who have less power. That includes people who work for tips, those in the hospitality industry, and workers in the gig economy. In 2020, the U.S. Department of Labor recovered over $1.4 billion in back wages for workers, an average of $1,120 per worker.

It wasn’t the Department of Labor, however, that discovered wage theft at Amazon.com Inc., however. It was the Federal Trade Commission (FTC).

According to the FTC’s complaint, in 2015 Amazon advertised a program called Flex. Amazon promised to pay drivers between $18 and $25 per hour plus tips to make deliveries. However, in late 2016 the company “secretly reduced its own contribution to drivers’ pay,” the FTC says, and used customer tips to make up the difference.

“In total, Amazon stole nearly one-third of drivers’ tips to pad its own bottom line,” said the FTC commissioner in a statement. Amazon has agreed to settle the matter for $61.7 million, which will be distributed to the workers.

Amazon apparently changed its payment model altogether in August 2019, when the FTC opened its investigation. The company has said that it doesn’t agree that it was unclear how drivers would be paid.

This was a relatively straightforward form of wage theft, although it was probably a challenge to uncover. The commissioner has urged the FTC to continue investigating and to determine whether other workers are in danger of wage theft from “dominant middlemen” like Amazon.

Have your wages been stolen? You may have noticed, for example, an unexplained downward trend in the tips you receive. You may have been told you are not eligible for overtime pay even though you’re required to work more than 40 hours a week. Or, an employer may have withheld your final check.

Wage theft is far too common and extremely serious. If you have been affected, contact an experienced wage and hour attorney for help.