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Amazon to pay $61.7 million in independent contractor action; other platforms could come under scrutiny

Staffing Industry Analysts (SIA) reports that Amazon will pay more than $61.7 million for not paying independent contractor drivers the full amount of times they received.

Amazon will pay more than $61.7 million in the wake of Federal Trade Commission charges that it didn’t pay Amazon Flex independent contractor drivers the full amount of tips they received. The FTC voted 4-0 to issue an administrative complaint against the company, and some commissioners said other on-demand platforms could also come under scrutiny.

The $61.7 million in Tuesday’s announcement represents the full amount the company didn’t pay drivers that will be paid back to Amazon Flex drivers.

Amazon Flex is a program where independent contractor drivers use their own vehicles to make deliveries of goods and groceries ordered through the Prime Now and AmazonFresh programs.

The FTC alleges the company shifted from paying the drivers a rate of $18 to $25 per hour plus the full amount of customer tips to a lower hourly rate. The agency alleged Amazon used customer tips to make up the difference between the new, lower hourly rate and the promised rate of $18 to $25 per hour. The change was not disclosed to drivers.

The administrative complaint, along with the $61.7 million payment, was issued by the FTC, which will publish a description of the consent agreement for 30 days for public comment. After the 30 days, the commission will decide whether to make the order final.

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