“When companies mislead customers to boost their profits by stealing tips intended for their workers, they are cheating their consumers, their employees, and their competitors who play by the rules,” DC Attorney General Brian Schwalb said.
Amazon has agreed to pay $3.95 million to settle a Washington, D.C., lawsuit alleging that it subsidized labor costs by taking tips intended for its delivery drivers.
According to FOX Business, D.C. Attorney General Brain L. Schwalb claims that Amazon misled District consumers between 2016 and 2019 by assuring them that any tips they chose to leave would go directly to Amazon Flex drivers, who deliver packages using their own vehicles.
However, Schwalb said that Amazon diverted millions of dollars in tips, using them to pay a portion of employees’ base wages.
“When companies mislead customers to boost their profits by stealing tips intended for their workers, they are cheating their consumers, their employees, and their competitors who play by the rules,” Schwalb said.
“It’s not sufficient, after being caught, to simply give back the ill-gotten gains,” he said. “Rather, there must be meaningful consequences to deter misconduct from happening in the first place. Especially when living expenses are harder and harder to afford, my office will continue to ensure that hardworking District residents receive every penny of their earnings and consumers have confidence that they are not being misled.”
Although Amazon agreed to pay $3.95 million to settle Schwalb’s lawsuit, the company insists that it did not engage in any form of wage theft or misconduct.
“For nearly a decade, Amazon Flex has empowered delivery partners to earn extra money on their own schedules,” Amazon spokesperson Steve Kelly said in a statement. “Like any successful program, Amazon Flex has evolved over time, and this lawsuit relates to a practice we changed more than five years ago. While we continue to disagree with these allegations, we’re happy to have the matter behind us so we can continue to focus on supporting delivery partners and customers.”
In court documents, Amazon attorneys took the opportunity to restate the company’s position on the lawsuit, reiterating that its belief that Schwalb’s lawsuit was without merit.
“Amazon maintains that it made truthful, complete, unambiguous, and accurate representations to customers regarding tips for drivers,” Amazon wrote in the settlement.
Amazon also pledged to maintain more transparent tipping policies.
“If Amazon uses tips for any purpose other than increasing driver compensation, the company must make clear disclosures about how tips are used on both its website and its app,” the agreement states.
The $3.95 million settlement includes $2.45 million in penalties and $1.5 million in costs.
Sources
Amazon to pay $3.95 million settlement over stolen tips for DC delivery workers
Amazon to pay $4M to settle suit accusing company of stealing tips from drivers
Join the conversation!