FTC Approves Final Administrative Consent Order Against Amazon for Withholding Customer Tips from Amazon Flex Drivers

Amazon also will be prohibited from making any changes to how a driver’s tips are used as compensation without first obtaining the driver’s express informed consent

Following a public comment period, the Federal Trade Commission has approved a final administrative consent order against Amazon, which has agreed to pay more than $61.7 million to settle charges that it failed to pay Amazon Flex drivers the full amount of tips they received from Amazon customers over a two and a half year period.

According to the FTC’s administrative complaint, announced in February 2021, the company regularly advertised that drivers participating in the Flex program would be paid $18-25 per hour for their work making deliveries to customers. The ads, along with numerous other documents provided to Flex drivers, also prominently featured statements such as: “You will receive 100% of the tips you earn while delivering with Amazon Flex.”

The FTC’s complaint alleges that Amazon also assured its customers that 100 percent of any tips they paid would go to the driver. According to the complaint, the company stopped the challenged conduct only after becoming aware of the FTC’s investigation in 2019.

The final order requires Amazon to pay $61,710,583, which represents the full amount that the company allegedly withheld from drivers and will be used by the FTC to compensate drivers. In addition, Amazon will be prohibited from misrepresenting any driver’s likely income or rate of pay, how much of their tips will be paid to them, as well as whether the amount paid by a customer is a tip.

Amazon also will be prohibited from making any changes to how a driver’s tips are used as compensation without first obtaining the driver’s express informed consent. The company will be subject to the Commission’s final order for twenty years and liable for civil penalties of up to $43,792 per violation should it violate that order.

The Commission vote approving the final consent order was 4-0.

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