Walmart has agreed to a $100 million settlement to resolve a lawsuit brought by the Federal Trade Commission (FTC) regarding deceptive pay practices within its Spark Driver service, which utilizes gig workers for local store deliveries. The lawsuit alleged that Walmart misled drivers about their potential earnings, including base pay and tips, and deceived customers by misrepresenting tip distributions.
The FTC, along with several states, accused Walmart of various deceptive practices, such as splitting tips between drivers for the same order, removing tips from batch orders without driver notification, and reducing drivers’ base pay after accepting offers. Additionally, Walmart falsely assured customers that 100% of their tips went to drivers.
As part of the settlement, Walmart is required to implement an earnings verification program to ensure drivers receive their promised earnings and tips. The company is also prohibited from modifying base pay, incentives, or tips post-offer, except under specific circumstances, to prevent further deceptive practices.
Source: TechCrunch