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In the face of increasing union pressure, Amazon has announced another pay raise for its subcontracted delivery drivers across the United States.
On Thursday, Amazon disclosed that delivery drivers working under its Delivery Service Partners (DSP) program will now earn an average wage of nearly $22 per hour, representing a 7% increase from the previous average of $20.50.
This wage hike is part of a broader $2.1 billion investment by the Seattle-based e-commerce giant into its delivery network. Rather than employing drivers directly, Amazon relies on thousands of independent businesses to handle the delivery of millions of packages daily.
This move follows a similar pay increase for U.S. drivers last year. Additionally, just last week, Amazon announced a wage increase by at least 9.8% for frontline workers in the United Kingdom.
Since its inception in 2018, Amazon’s DSP program has added 390,000 driving jobs. The company’s total investment of $12 billion has been allocated to enhance safety programs and provide incentives for these partner businesses.
However, Amazon’s business model, which involves an additional layer of separation from its delivery drivers, has come under increased scrutiny from U.S. labor regulators. Labor groups like the Teamsters argue that Amazon exerts significant control over these subcontracted workers by dictating their routes, setting delivery targets, and monitoring performance. As a result, they contend that Amazon should be classified as a joint employer, a designation the company is resisting.
Labor regulators seem increasingly inclined to side against Amazon. Recently, a National Labor Relations Board (NLRB) prosecutor in Atlanta ruled that Amazon should be held jointly liable for allegedly making threats and other unlawful statements to DSP drivers attempting to unionize. Similarly, NLRB prosecutors in Los Angeles last month determined Amazon to be a joint employer of subcontracted drivers in California.
If these cases do not result in settlements, the NLRB might bring forth a formal complaint against Amazon, to be addressed within the agency’s administrative law system. Amazon retains the right to appeal any judge’s decision to the agency’s board and, subsequently, to a federal court.