Additional Coverage:
- FTC chair touts ‘huge win for American workers’ after Walmart agrees to $100M settlement over driver pay (foxbusiness.com)
Walmart to Pay $100 Million in Settlement Over Deceptive Driver Pay and Tips
Washington D.C. – Retail giant Walmart has agreed to a $100 million judgment to resolve allegations that it misled its delivery drivers regarding their compensation and tips. The Federal Trade Commission (FTC) announced the settlement on Thursday, with FTC Chair Andrew Ferguson hailing it as “a huge win for American workers.”
The FTC’s investigation, conducted in collaboration with 11 states, found that Walmart misrepresented base pay, incentive pay, and tips to its Spark delivery drivers, leading to “tens of millions of dollars’ worth of earnings” being withheld, according to the agency.
“What we concluded in our investigation is that… Walmart was misrepresenting both how much drivers were going to get paid and where tips were going, both to drivers and consumers,” Ferguson stated in an interview. “That meant that drivers were denied millions and millions of dollars that they thought they were going to get when they signed up to do these jobs for Walmart.”
The settlement mandates that Walmart not only pay $100 million to the affected drivers but also implement significant changes to its business practices. These changes are intended to ensure that all representations made to both drivers and consumers about compensation are “correct [and] accurate,” and that the company “will live up to its promises.”
Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection, emphasized the importance of transparency in the labor market. “Labor markets cannot function efficiently without truthful and non-misleading information about earnings and other material terms,” Mufarrige stated in a press release.
A spokesperson for Walmart told Reuters that the company has already compensated some affected drivers and is continuing to process additional payments where necessary. “We value the hard work and dedication of the drivers who deliver great service and products to our customers… We are continuously improving procedures to ensure fairness and transparency for drivers,” the spokesperson added.
Ferguson underscored that this action extends beyond Walmart, serving as a warning to other gig delivery services. “Any of the sort of gig delivery services that try to induce people to do deliveries by making promises about compensation have to be honest about those promises, and we’re going to hold everyone to account – not just Walmart,” he affirmed.