California regulators have fined Amazon.com Services and a Santa Ana-based delivery company $6.4 million for failing to pay 718 workers for meal breaks and overtime when their 10-hour shifts ran long.
The fine amounts to $7,388 per worker, with some of the penalties going to the state.
The year-long investigation by the state Department of Industrial Relations found that drivers working for Green Messengers Inc. making Amazon deliveries in Los Angeles, Orange and San Bernardino counties were often too pressed by crushing loads of deliveries to stop for breaks.
The probe, which began in summer 2019, found violations from April 2018 through January 2020, before the coronavirus pandemic began.
“Contracting out services does not release employers from their duty to ensure workers are being legally compensated,” California Labor Commissioner Lilia García-Brower said in a statement. “In this case, both Green Messengers and Amazon.com Services are responsible for the wage theft that these workers suffered.”
Both companies have appealed the citations.
Green Messenger representatives could not be reached Monday, as the company’s website and phone number weren’t working. Amazon officials also were unavailable for comment.
The breakdown
The amount payable to workers includes $3,377,988 in damages and waiting-time penalties, $762,850 in penalty assessments for not providing proper wage statements, $882,735 for split-shift, meal and rest break premiums and $281,195 for minimum wage, overtime and contract wages.
Green Messengers and Amazon.com Services are responsible for the amounts due to workers according to California’s client-employer liability law, which has been in effect since 2015. The law holds client-employers that obtain labor from a subcontractor liable for their workplace violations.
The citations issued to Green Messengers Inc. include $1,149,342 in civil penalties payable to the state.
Under the appeal procedure, the Labor Commissioner’s Office will hold a hearing before a hearing officer who will affirm, modify or dismiss the citations.
E-commerce ramps up
The U.S. Census Bureau reported last month that e-commerce sales totaled nearly $792 billion in 2020, up 32.4% from the previous year.
Amazon saw its business ramp up significantly last year as more consumers opted to buy to their products online to avoid visiting brick-and-mortar stores during the COVID-19 pandemic.
Amazon’s new 640,000-square-foot fulfillment center in Beaumont began operation in September with 1,000 full-time workers.
Digital Commerce 360 estimates that COVID-19-related boosts in online shopping resulted in an additional $174.87 billion in e-commerce revenue in 2020.
In February, Amazon.com agreed to pay $61.7 million to settle a U.S. Federal Trade Commission finding that the company withheld tips meant for Flex delivery drivers for more than two years.
Despite pledging to drivers and shoppers that Flex drivers would receive 100% of the value of tips, Amazon used a portion of the gratuities to pay the basic hourly rate for the on-demand package delivery program.
Rebecca Kelly Slaughter, acting chairwoman of the Federal Trade Commission, and Commissioner Noah Phillips deemed the conduct alleged in the complaint as “outrageous,” saying platform companies that operate in the gig economy “must treat their workers fairly and non-deceptively.”
