The retail giant Walmart has reached a $100 million settlement with federal regulators over accusations that the company misled delivery drivers about their potential earnings, costing them tens of millions in lost income.
The Federal Trade Commission announced Thursday that the Arkansas-based company displayed exaggerated base pay rates and tip amounts to participants in its gig-based delivery service known as Spark. Eleven states including Pennsylvania joined the federal agency in bringing the case forward.
According to the FTC, Walmart also misled shoppers by incorrectly stating that customer tips would be fully passed along to delivery drivers.
“Labor markets cannot function efficiently without truthful and nonmisleading information about earnings and other material terms,” Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, stated.
Under the settlement terms, Walmart must establish a system to verify driver earnings and ensure promised payments and tips are actually delivered to workers.
In response, Walmart acknowledged that it “values the hard work and dedication of the drivers who deliver great service and products to our customers.” The company indicated it has already begun compensating affected drivers and will continue making additional payments where needed.
“We are continuously improving procedures to ensure fairness and transparency for drivers,” the retailer stated.
