back to article FTC approves $61.7m settlement with Amazon for pocketing driver tips

The US Federal Trade Commission on Friday announced the approval a consent order against Amazon that requires the company to pay $61.7m to resolve charges that for two and a half years it took tips intended for Amazon Flex drivers and concealed the diversion of funds. The deal was proposed in February but required sign-off …

  1. Gene Cash Silver badge

    Tip fuckery

    I had to go back to a restaurant last week when I wasn't charged for the generous tip I left the waiter for his above-and-beyond service.

    Sure enough, they'd stiffed him. I complained loudly. I now leave the tips in cash.

    1. MachDiamond Silver badge

      Re: Tip fuckery

      I've worked in hospitality and I always tip in cash. It can be a demanding job and being able to cheat the tax man a bit is much easier if the tips are cash rather than electronic. There isn't any other way to tip a bellman, valet or porter when there is no other concomitant transaction taking place.

      1. Anonymous Coward
        Anonymous Coward

        Re: Tip fuckery

        This is the only reason I carry any cash at all. To give tips. I'll put some of the tip on the card. Then I'll add a few more dollars under the plate. That's the only way I know they'll get _something_.

        (Former busser - an education in that most mercurial beast: the diner)

        1. dvd

          Re: Tip fuckery

          I must admit I thought it was common knowledge that if you put a tip on a card then the employee is unlikely to see it. I always tip cash and never tip a penny electronically.

          1. keith_w Bronze badge

            Re: Tip fuckery

            My son is a bartender at a sports facility. He and the wait staff cash out the card tips as they are received. They also tip the kitchen staff 1 percent of their food orders and the wait staff tip the bar staff 1 percent of their drink orders.

    2. Fruit and Nutcase Silver badge
      Joke

      Re: Tip fuckery

      "I now leave the tips in cash."

      @Gene Cash

      Cash in Name, Cash in Deed

    3. elDog

      Re: Tip fuckery

      Actually, this seems to be a normal practice. When the bill is initially put through via a charge card, it only shows the amount of the meal (plus tax/etc.). If a tip is added, that *should* show up later in the actual bank charges. At least, that is my experience in the USofA.

      1. sofaspud

        Re: Tip fuckery

        Unfortunately, it also depends on the state in the USA. For example, some states have a minimum wage for waitstaff at somewhere around $2.50/hour, plus tips. The employer still has to pay the federal minimum of $7.50 (or whatever it is), but they're allowed to make up the difference by applying customer tips to the wage owed before they have to dip into their own pockets to pay their staff.

        In *some* states, I stress. I live in one where that's not legal, thankfully.

  2. Imhotep Silver badge

    Den Of Thieves

    Just where do they find the lowlifes that pull stunts like this? Is this really what companies consider executive material?

    1. Sorry that handle is already taken. Silver badge

      Re: Den Of Thieves

      And why are they always protected from criminal prosecution for wage theft?

    2. Chris G Silver badge

      Re: Den Of Thieves

      Theft and deceit is exactly what this is and should have been treated as a criminal action, it wasn't misguided managers trying to maximise profit, it was stealing from the drivers and misrepresentation to the customers who thought the tips they were paying were personal rewards to the drivers for good service.

      Instead the tips paid in good faith were stolen and effectively embezzled.

      That corporate managers or executives would do that is a reflection on the company from the top down.

      1. keith_w Bronze badge

        Re: Den Of Thieves

        This is why I tip delivery drivers cash

    3. steelpillow Silver badge
      Devil

      Re: Den Of Thieves

      "Just where do they find the lowlifes that pull stunts like this? Is this really what companies consider executive material?"

      You misunderstand. It is precisely what big companies use to mark out executive material from the common herd.

  3. Anonymous Coward
    Anonymous Coward

    Amazon

    It’s a jungle out there

    1. Vometia has insomnia. Again.

      Re: Amazon

      I now have an angry-sounding Grandmaster Flash stuck in my head. Thanks. :|

  4. Pascal Monett Silver badge
    Devil

    So, let me see if I get this correctly

    Step One : public announcement : drivers will get 100% of their tips.

    First off, if you have to announce that, there's already something wrong.

    Then, second step : switch to variable base pay rate without telling anyone.

    Ok, for that to happen, there had to have been a meeting. Someone chaired a meeting with a group of other people and the question was, specifically : how do we not pay 100% of the tips, like we promised ?

    And all the good little soldiers brainstormed that little switcheroo.

    The next question was : how do we keep the drivers from learning about it ?

    Well, at that point, anybody could think of lumping all the tips together without any possibility of checking which tip for which job. The less you communicate, the easier it is to hide things.

    What this whole story tells me is that Bezos is far from being the only evil one in Amazon. He's got an army of evil minions who have absolutely no morals at all, and they're all in upper management.

    1. Anonymous Coward
      Anonymous Coward

      Re: So, let me see if I get this correctly

      And then the computer programmers coded the algorithmically set internal base rate calculations knowing full well they were coding theft.

      1. anonymous boring coward Silver badge

        Re: So, let me see if I get this correctly

        “ And then the computer programmers coded the algorithmically set internal base rate calculations knowing full well they were coding theft.”

        Doubt it. Someone changed some parameters. Probably not an actual programmer.

        1. doublelayer Silver badge

          Re: So, let me see if I get this correctly

          I think they likely did involve a team of programmers. That logic isn't simple enough to do by changing variables. After all, they have to do something if the customers didn't tip well enough some day so the drivers couldn't see that they were having their wages stolen, probably increasing their variable rate temporarily. That requires something to be done on ongoing data. They theoretically could have implemented that by telling the programmers to implement an abstract function that took a lot of parameters, but probably they wouldn't have gone to that much effort.

          1. AVR

            Re: So, let me see if I get this correctly

            Otherwise good people can do bad things. I was once told that some figures couldn't be faked, our finance department were good people. As it happened they were. No reason these theoretical programmers might not be similar.

          2. Shalghar

            Re: So, let me see if I get this correctly

            Oh yeah, something complex like

            all tips>companypocket()

            payout=(alleged baserate)+(all tips/100)

            put in a randomizer for the tips percentage to get "really sneaky".

            If the programmers would have known is up to assumption, noone has seen the source and noone knows how the variables are named.

            That this scheme was fully intentional and clearly theft, fraud (false display of earnings) and whatever the crime book compatibility check might spew out is out of the question IMHO.

            And just in this week, the german CDU refuses to respect the coalition treaty (and the SPD of course does nothing against it) to make a law intended to protect whistleblowers and make corporations liable for crimes they commit.

            So this is by far and wide not a "typical US issue".

    2. skeptical i
      Thumb Down

      Re: So, let me see if I get this correctly

      re: "Bezos is far from being the only evil one in Amazon"

      The speed of the leader is the speed of the pack.

      Fish rot from the head down.

      Other such cliches exist, insert any one of them here.

      Given how employees at other Amazon operations are treated (having to pee in bottles because rest room breaks are docked as "time off task" springs first to mind) I can not say I'm surprised. Disgusted anew and wondering why anyone continues to use Amazon if any other options exist*, but not at all surprised.

      * I know there are folks who can not leave their homes for whatever reason and rely more on home delivery than most, this is not directed at them.

  5. Big_Boomer Silver badge

    Wage theft

    Tipping should be to reward exceptional service, not part of their pay package. Why are the people responsible for this theft from their staff not being prosecuted for theft. This isn't accidental, it is deliberate, pre-meditated, criminal theft. If someone walked into Amazon and helped themselves to $60 million, then Amazon would be screaming for maximum penalties, but because it's a corporate decision, nobody gets prosecuted? One law for them, another for the rest of us.

    1. John Brown (no body) Silver badge

      Re: Wage theft

      "but because it's a corporate decision, nobody gets prosecuted? One law for them, another for the rest of us."

      It's funny how corporations are "people" when it comes to claiming "rights" but never seem to be "people" when it might disadvantage them. All the rights, none of the responsibility.

      1. Falmari Silver badge

        Re: Wage theft

        @John Brown (no body) ”All the rights, none of the responsibility.”

        I agree corporations and employees should be accountable to the same laws as people. The employee who made the decision to implement “Flex pay” should be charged with fraud. Held to the same accountability under the law as any other person.

        As for Amazon how to you punish them? Well corporations would have us believe they are "people" so surely the same laws and punishments apply to them. So, treat them like people, charge, prosecute and if found guilty sentence them like a person.

        But you can’t lock up corporations (oh how I wish we could) like people but we can replicate some of the effect. Replace loss of liberty with loss of profit. So, a three year sentence would be three years loss of profit. Take the last five years of worldwide profit and calculate the next three years projected profit and fine them that. That fine can not be used as operating cost or in any other way to offset taxes. In this case they should also be ordered to pay back what they defrauded from their drivers.

        Replace loss of liberty with loss of profit just an idea, the point is corporations should be held to the same accountability under the law as people. Subject to the same punishments that people are when they transgress the law.

      2. DJO Silver badge

        Re: Wage theft

        If corporations want to be "people" then then they should have all the responsibilities the real people have, including paying income tax on every penny/cent of income with the same threat of prison time for breaking the rules that real humans are exposed to.

        Obviously throwing a corporation into prison would be "problematical" so the board of directors should be the ones punished for malfeasance.

        In fact the entire system of punishing companies for breaking laws is a total joke, any fines come not from the malefactors but ultimately from the customers and workers, for the guilty parties on the board there are no repercussions even for the most serious crimes such as corporate manslaughter.

  6. jezza99

    I continue to refuse to buy Amazon because I find their employment practises around the world to be abhorrent.

    1. Aus Tech

      I continue to refuse to buy Amazon

      That's good enough for me, now that I know about them stealing wages.

  7. W.S.Gosset Silver badge
    Mushroom

    What gets me

    is the obsessive pettiness of it. Given Amazon's revenue and profit, this isn't even a blip on a basis point.

    It's internal-status driven, not profit-driven.

    It's just kneejerk reflexive screwing down and screwing over of pleb-level staff, given (and finding/identifying) any opportunity.

    For the inner-circle staff to independently think of this then implement it, screams that the entire internal culture is far more homogeneously toxic and people-antagonistic than even the worst of the already disturbing/horrifying employee-subjugation stories which have hit the media.

  8. Anonymous Coward
    Anonymous Coward

    Settlement?

    For the amount of tips only? No damages or interests? So ultimately, it costs them nothing, they merely tried for it and didn't get it, no consequence?

    Great, that's sure to remove the incentive to try again for something else. /s

  9. Anonymous Coward
    Anonymous Coward

    Give all tips to staff

    Or

    Keep the tips (if you must) and pay higher wages, that is, decent wages.

    Simple really.

    Otherwise you seem like a real dick.

    1. CrackedNoggin

      Re: Give all tips to staff

      While recruiting, they advertised drivers would keep the tips. Wages levels are a separate issue.

  10. Fruit and Nutcase Silver badge
    Alert

    Blue Origin

    If the passengers on the upcoming Blue Origin flight with Bezos choose to reward/thank the crew with some gratuity, will Bezos/Blue Origin get their mitts on it?

    1. John Brown (no body) Silver badge

      Re: Blue Origin

      People with that kind of spending power don't actually spend money and tipping isn't even on their radar. They have "people" to handle grubby things like money.

  11. Tom 7 Silver badge

    Not just wage theft - tax theft too.

    https://www.bbc.co.uk/news/business-57383869

  12. xyz123

    Supposed to last 20 years. Amazon within 48hours went RIGHT back to stealing tips.

    This time they've "accidentally" processed tips as the tax they have to pay on the drivers salary.

    They pay the tips as the tax, then take the "tax" from the drivers salary and keep it. And report $0.00 tips.

    The system is now designed to not affect what are described internally as "money bitches". Those employees likely to check their payslips rigorously over the next few years.

    They've basically stuck their fingers up at the government, and have already commited TENS OF THOUSANDS of breaches since the ruling.

    at $43k per breach, they already owe hundreds of millions in fines. But that'll take years.

  13. FlippingGerman

    Stealing

    How come no one gets put in prison for stealing massive amounts of money?

  14. Don 9

    Where was the penalty?

    So these guys got the money they were supposed to get. Where are the treble damages? This is typical businessman f*ery. They don't pay you and worst case the judge makes them pay you. They always come out ahead. Nope I want to see a judge throw penalties.

  15. martyn.hare
    FAIL

    Don’t tip! You’re hurting the people you’re showing gratitude towards!

    I know it sounds evil but this is one of these situations where you are harming people by doing it. Countries where tipping is not normal pay their workers fairly, while those where tipping is commonplace generally do not. That is because the tips become “expected” and then eventually become relied upon as part of income. Now, you might be thinking that does not sound too bad at an individual level but you’re indirectly subsidising the co pay to pay workers less and eventually tips are relied upon for establishments to survive. That is very very very bad.

    So, next time you think about tipping, don’t!

    If everyone stops tipping, workers will be paid more, you will only pay slightly more for your services long term and everything will be taxed correctly.

    1. Throatwarbler Mangrove Silver badge
      FAIL

      Re: Don’t tip! You’re hurting the people you’re showing gratitude towards!

      Thanks, Mr. Pink. In reality, the employers will just do what they've been doing and find new ways to shaft the employee. The best thing you can do personally is tip in cash. After that, support a living minimum wage combined with VAT (if your country doesn't already have it).

  16. Matthew "The Worst Writer on the Internet" Saroff

    Why is No One Going to Prison?

    And it should not be white collar prison, it should be "Federal PMITA Prison," to acronym the movie Office Space.

    Everyone in those email chains is guilty of criminal conspiracy, even if they were objecting, if they did not go to the authorities. Charge them, and get them to roll on higher ups.

  17. Howard Sway

    in August 2019, Amazon announced an "Updated Earnings Experience"

    You get some. Possibly.

  18. -maniax-

    Did I miss the bit where Amazon are actually being punished for their actions?

    "The $61.7m settlement represents the amount of tips that Amazon allegedly withheld from drivers"

    Where's the actual punishment?

    Returning money that you weren't supposed to take in the first place isn't punishment

  19. Mr Booth
    FAIL

    Just the tip...

    Thank fuck I live in a "civilzed" country, (.nz), where tipping is optional and by choice....

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