Amazon Agrees to Pay $4 Million to Settle Lawsuit Over Using Customer Tips to Fund Delivery Drivers’ Minimum Wages. The District of Columbia filed a lawsuit against Amazon, claiming the company deceived consumers from 2016 to 2019 through its Amazon Flex program which led people to believe that all tips paid to drivers would go into their accounts. According to the allegations, Amazon shifted these tips to fund its labor expenses resulting in significant reductions in operating costs. The Amazon Flex program started in 2015 by telling drivers that all customer tips would go straight to their accounts. According to allegations, Amazon modified its payment procedure in 2016 to apply tip funds toward drivers’ minimum wage payments before informing consumers or drivers about this change only in 2019 when the FTC started an investigation. The authorities claimed Amazon forced more than $1 million in tips into its account during this time period. The Federal Trade Commission launched an investigation that led Amazon to agree to pay all tips owed to drivers through a 2021 settlement. The District of Columbia Attorney General’s office went beyond the federal case and started legal action to get civil penalties and injunctions that would stop such practices from occurring going forward. Amazon will pay $3.95 million as part of the settlement, consisting of $2.45 million in penalties and $1.5 million in costs. The settlement exists because Amazon claimed the practice ended five years ago and now both Amazon and the company can focus on helping delivery partners and customers.
Amazon to Settle Lawsuit for $4 Million
