Walmart is set to pay about $16 million to Spark drivers as part of a larger settlement over claims that it misled workers about pay and tips.
The Federal Trade Commission said on Thursday that Walmart agreed to a $100 million settlement over claims that the big-box retailer told Spark drivers they would earn more in base pay than they actually did. The FTC also said Walmart misled drivers “by falsely claiming that 100% of customer tips would actually go to drivers.”
Part of the proposed settlement includes a “driver fund” that would distribute $16.2 million to Spark drivers whose actual pay was lower than what Walmart promised through the delivery app, according to court documents. The payouts apply to offers Walmart made to drivers as far back as January 1, 2021.
“In many instances, Walmart either failed to notify drivers at all about the change in base pay and tips or only notified them of the change in their earnings after they completed the delivery,” the FTC said in its announcement.
A Walmart spokesperson said that the retailer values “the hard work and dedication of the drivers who deliver great service and products to our customers.”
“We have issued payments to impacted drivers and continue to make additional payments as appropriate,” the spokesperson said. “We are continuously improving procedures to ensure fairness and transparency for drivers.”
Last year, Walmart sent some Spark drivers surprise tip payments, some worth hundreds of dollars each. The company said it had identified some workers who had not received full tip payments in the past and had sent the payments, including interest.
Walmart “failed to notify drivers that, unlike the payment for the goods being delivered, the payment for the advertised tip amount had not been preauthorized, and therefore drivers would not receive that amount if the customer was unable to cover the cost of the tip or if the charge otherwise failed,” the FTC said.
Walmart also sometimes split a customer’s tip across multiple drivers when filling an order that required multiple deliveries — a practice it also failed to tell drivers about, the FTC’s complaint said.
Other companies that rely on gig workers for deliveries have also faced charges that they failed to pay out tips.
Last year, for example, DoorDash agreed to pay $16.75 million to 60,000 of its delivery workers in New York state to settle claims that the service used tips to offset workers’ base pay.
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