The largest Amazon Flex driver settlement is the Federal Trade Commission’s $61.7 million agreement resolving charges that Amazon secretly used customer tips to subsidize driver pay between 2016 and 2019. The FTC returned nearly $60 million to drivers in November 2021 and sent a second round of $2.3 million in May 2025. Separate actions in Washington, D.C., Seattle, and New Jersey, along with a large mass-arbitration campaign in three states, have added to the pressure on the program, though not every case has produced money for drivers.
The FTC Tip-Withholding Settlement
When Amazon Flex launched in 2015, drivers were promised a base rate of $18 to $25 per hour plus 100% of customer tips. In late 2016, Amazon quietly began using tips to fill the gap up to that hourly rate rather than paying them on top, and stopped displaying tip amounts separately. The practice continued for roughly two and a half years and ended in August 2019, only after Amazon learned of the FTC investigation.1FTC. Amazon Flex Complaint
In February 2021, the FTC voted 4–0 to settle. Amazon agreed to pay $61,710,583, the full sum of tips the agency said had been diverted.2FTC. Amazon Pay $61.7 Million to Settle FTC Charges It Withheld Some Customer Tips From Amazon Flex Drivers The final administrative consent order, entered June 10, 2021, also barred Amazon for 20 years from misrepresenting driver pay or changing how tips factor into compensation without a driver’s express informed consent. Each violation can trigger a civil penalty of up to $43,792.3FTC. FTC Approves Final Administrative Consent Order Against Amazon for Withholding Customer Tips From Amazon Flex Drivers
Who Was Eligible and How Much Drivers Received
Any driver who had more than $5 in tips withheld during the 2016–2019 period qualified for the full amount taken. The FTC sent the first round of payments in November 2021: 139,507 checks and 1,621 PayPal payments, totaling more than $58.5 million. The average payment was about $422, and the largest single payment exceeded $28,000.4FTC. FTC Returns Nearly $60 Million to Drivers Whose Tips Were Illegally Withheld by Amazon5Fox 13 News. Amazon to Pay Back Nearly $60M in Withheld Tips to Flex Drivers, FTC Says
Because money remained in the fund, the FTC announced a second round in May 2025 for 19,478 drivers who had cashed their first check and had $600 or more in tips withheld. That round distributed an additional $2.3 million, and recipients were told to cash the checks within 90 days.6FTC. Refunds for Amazon Flex Drivers
Questions about either round go to the FTC’s refund administrator, Rust Consulting, at 1-800-654-8874.
Taxes on the Payment
The FTC treated the refunds as reportable income, not tax-free restitution. Drivers whose total payments exceeded $600 received an IRS Form 1099 and were instructed to report the income on their returns. In the first round, 19,980 drivers hit that threshold.4FTC. FTC Returns Nearly $60 Million to Drivers Whose Tips Were Illegally Withheld by Amazon
Washington, D.C. Attorney General Settlement
The D.C. Attorney General sued Amazon in December 2022 under the District’s Consumer Protection Procedures Act over the same tip practices, alleging the company misled consumers who believed their tips were going entirely to drivers.7Office of the Attorney General for the District of Columbia. AG Racine Sues Amazon for Stealing Tips From Delivery Drivers
In February 2025, Attorney General Brian Schwalb announced a $3.95 million settlement: $2.45 million in civil penalties and $1.5 million for the office’s litigation costs. Amazon admitted no wrongdoing but agreed to disclose clearly on its website and app any use of tips for purposes other than increasing driver pay.8Office of the Attorney General for the District of Columbia. AG Schwalb Secures $3.95 Million From Amazon to Resolve Consumer Protection Claims None of this money goes to drivers directly; driver recovery for the same underlying conduct came through the FTC refund program.
Seattle Gig Worker Ordinance Settlement
Seattle’s Office of Labor Standards investigated whether Amazon Flex complied with three city gig worker ordinances covering premium pay and paid sick and safe time. The office found Amazon provided those benefits to food and grocery delivery drivers but excluded drivers picking up packages from Amazon warehouses.9City of Seattle. OLS Settlement With Amazon Logistics
Amazon denied the allegations but agreed to a settlement totaling $3,777,924.10, covering payments and paid sick time credits for 10,968 workers, plus $20,000 in fines to the city. The premium pay violations ran from August 2021 through October 2022; the sick time violations ran from January 2021 through January 2024. Payments to affected workers were expected to begin around January 1, 2026.10GeekWire. Amazon Will Pay $3.7M to Settle Labor Claims in Seattle for Alleged Gig Worker Ordinance Violations11The Seattle Times. Amazon to Pay $3.7M to Settle Seattle Labor Law Investigation
Mass Arbitration in California, Illinois, and Massachusetts
A separate legal front is still open. Drivers in California, Illinois, and Massachusetts, represented by Cohen Milstein and Gibbs Law Group, are pursuing individual arbitration claims arguing Amazon misclassifies them as independent contractors and owes them minimum wage, overtime, and reimbursement for mileage and phone use. Because Amazon’s driver agreement bars class actions and routes disputes to the American Arbitration Association, the firms have filed claims one by one at large scale. By June 2024, filings with the AAA exceeded 32,000, including more than 15,750 filed on a single day.12Cohen Milstein. Amazon Flex Drivers
The claims lean on the ABC Test used in all three states, which presumes workers are employees unless the hiring company can prove otherwise. In California, drivers argue they are only paid for scheduled delivery “blocks” even when routes run long, with no pay for waiting to pick up packages.13Cohen Milstein. Amazon Flex Drivers File Thousands of Wage-Hour Actions Against Amazon
As of mid-2024, seven bellwether arbitrations had been decided in drivers’ favor, with awards averaging about $9,000 per driver and some individual recoveries topping $20,000. Thousands more claims remain pending.14Cohen Milstein. Thousands of Drivers File Arbitration Claims Against Amazon for Unpaid Wages and Other Losses15Cohen Milstein. Amazon Flex Drivers Seek to Arbitrate Employment Status Under Amazon’s driver agreement, a driver’s filing fee at the AAA is capped at $200, with Amazon covering the rest.13Cohen Milstein. Amazon Flex Drivers File Thousands of Wage-Hour Actions Against Amazon
New Jersey Misclassification Lawsuit
On October 20, 2025, the New Jersey Attorney General and the state’s Department of Labor filed an eight-count suit against Amazon in the Superior Court of Essex County. The complaint alleges Amazon misclassifies Flex drivers under New Jersey’s ABC Test, denying them minimum wage, overtime, earned sick leave, and required wage records, and that the misclassification has cost the state’s Unemployment Compensation, Disability Benefits, and Workforce Development funds millions per year.16New Jersey Office of the Attorney General. Attorney General Platkin, Labor Commissioner Asaro-Angelo Sue Amazon for Exploiting Delivery Workers
Amazon called the suit “wrong on the facts and the law.” The case is expected to take years, and as of mid-2026 no substantive rulings have been reported.17NJBIZ. NJ Sues Amazon Over Flex Driver Misclassification18Independent Contractor Compliance. New Jersey Courts May Be Limiting the Labor Commissioner’s Effort to Curtail Independent Contractors No driver payments are currently on the table in this case.