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Amazon to pay $61.7M after failing to pay full driver tips

Feb. 2 (UPI) -- The Federal Trade Commission on Tuesday voted to approve an agreement in which Amazon will pay $61.7 million to settle allegations the online retailer failed to pay delivery drivers their full tips.

The FTC said the settlement represents the full amount the company allegedly withheld from Flex drivers, independent contractors who make Amazon deliveries using their personal vehicles.

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Under the terms of the settlement, the FTC said it will compensate the affected drivers using the $61.7 million paid by Amazon.

The Flex program allows customers to give tips, which Amazon said would be 100% passed on to the drivers.

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When Amazon first launched the program, it promised drivers an hourly rate of $18 to $25 per hour plus 100% of tips. In late 2016, though, Amazon lowered the hourly rate and used the customer tips to make up that difference in pay without informing drivers, the FTC said.

"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."

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The FTC said Amazon received hundreds of complaints after drivers' earnings decreased, but the company responded only that drivers were still receiving 100% of tips.

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Under the settlement, Amazon isn't allowed to change the way driver's tips are used without first receiving express informed consent from the drivers.

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