FTC returns almost $60 million to Amazon drivers whose tips were held illegally

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FILE – In this April 16, 2020, file photo, the Amazon logo is displayed in Douai, northern France. (AP Photo/Michel Spingler, File)

(ABC4) – On Tuesday, the Federal Trade Commission announced that they would be sending out almost $60 million to more than 140,000 Amazon drivers whose tips were withheld by the company.

The FTC will be sending out 139,507 checks and 1,621 PayPal payments to Amazon Flex drivers. The highest amount going to a single Amazon Flex driver is more than $28,000, while the average amount will be $422, a press release says.

The funds will serve as reimbursement for tips that Amazon illegally withheld from drivers between 2016 and 2019. Drivers who had more than $5 withheld by Amazon will receive the full amount of their withheld tips.

In June, the FTC brought a suit against Amazon and its subsidiary, Amazon Logistics, alleging that the company failed to fully pay tips that drivers in its Amazon Flex program had earned.

The lawsuit alleged that Amazon secretly kept drivers’ tips over a two-and-a-half-year period and only stopped once they became aware of the FTC’s investigation in 2019.

Amazon agreed to settle the case and surrender all the money it withheld from its drivers. The settlement agreement also prohibits Amazon 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, according to the FTC.

The company is also prohibited from making any changes to how a driver’s tips are used as compensation without the driver’s express informed consent.

The FTC advises people who receive checks to deposit or cash them before January 2022. Drivers whose payments are more than $600, will receive an IRS form 1099 and should report that income on their tax return.

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