Amazon’s caught up in a legal battle with the New Jersey Department of Labor (NJ DOL) and New Jersey Attorney General Matthew Platkin.
NJ DOL Commissioner Robert Asaro-Angelo and Platkin filed a complaint against the e-tail giant, alleging that it misclassifies “thousands” of New Jersey residents working through its Amazon Flex program as independent contractors. In reality, the government officials said, those people should be classified as employees.
According to the company’s website, Amazon Flex enables people to “use [their] own vehicle to deliver Amazon packages as a flexible way of earning extra money on [their] own schedule.” The same site notes that “most drivers earn $18-$25 an hour” when they deliver on behalf of Amazon.
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Platkin and Asaro-Angelo argue that New Jerseyans delivering via the Flex program should not be considered Amazon contractors.
“While Amazon labels Flex drivers… ‘independent contractors,’ they are in fact Amazon’s employees who, despite Amazon’s self-serving label, are entitled to the full slate of worker protections afforded to New Jersey employees,” the complaint reads.
“Amazon’s misclassification harms drivers by depriving them of rightful wages, benefits and other critical protections. It also shifts wealth to Amazon, allowing Amazon to save money by paying lower wages, pushing its business expenses onto its workers and avoiding contributions to critical state funds that protect New Jersey workers against financial hardship when they become temporarily unemployed or disabled,” it goes on to say.
The NJ DOL and the attorney general specifically accuse Amazon of skirting its duty to pay employees minimum wage and overtime wages, as well as failing to offer the Flex drivers sick leave time. The complaint notes that one Flex driver the complainants spoke with injured herself working a Flex shift, but had to use her own health insurance and take unpaid time off because she is considered a contractor.
The attorney general and the labor commissioner said the state uses what it calls the “ABC test” to determine whether workers are eligible to be classified as contractors: the individual has to be “free from control or direction over the performance of such service, both under his contract of service and in fact,” the service needs to be outside the company’s normal course of the business and the individual is “customarily engaged in an independently established trade, occupation, profession or business.”
Platkin and Asaro-Angelo said the Flex drivers don’t meet these three requirements, in large part, they allege, because of the controls Amazon exerts over their work. The complaint alleges that Amazon requires drivers to use its own application, controls which shifts a Flex driver is eligible to take, “prohibits drivers from negotiating the rate of pay for a [shift] and from completing their deliveries with the assistance of additional workers” and more.
The officials contend that Amazon uses “digital surveillance” to gather “information about drivers’ moment-by-moment activities that far exceeds what any traditional employer knows about its employees’ activity.”
Platkin said that by allegedly illegally misclassifying workers, Amazon is harming the drivers and the state alike under the guise of convenience.
“Let’s not make any mistake about this: when a trillion-dollar company says it is providing you with ‘a flexible way of earning extra money on your own schedule,’ it is not offering this opportunity for your benefit. Amazon is looking out for itself,” the attorney general said in a statement. “Amazon is taking advantage of Flex drivers and enriching its bottom line by failing to obey our labor laws and offloading its business expenses for the benefit of shareholders.”
Amazon did not immediately return Sourcing Journal’s request for comment on the lawsuit, but NJ.com reported that a company spokesperson said the lawsuit is “wrong on facts and the law” and “misrepresents what Amazon Flex is and how it works.”
Reportedly, the spokesperson further said that while Amazon is still reviewing the details of the lawsuit, it sees the Flex program as a viable way for New Jersey drivers to attain “flexibility” and “freedom” while earning money.
In their complaint, Platkin and Asaro-Angelo ask the court to issue a declaratory judgment stating that “[Flex] drivers were and are Amazon’s employees under state wage, benefit and tax laws.” They further request that a judge enjoin Amazon from “continuing to misclassify” Flex drivers as contractors and mandate that they be classified as employees so they can receive the benefits as such. What’s more, the officials ask that the court award any withheld wages and overtime to impacted New Jersey Flex drivers.
This isn’t the first time Amazon has gotten caught up in an issue about contractors. The company has repeatedly found itself accused of wrongfully declaring individuals contractors instead of employees.
The International Brotherhood of Teamsters has been bullish on pushing the National Labor Relations Board (NLRB), courts and the company itself toward calling drivers who work for its delivery service partners (DSPs) Amazon employees. Amazon has previously told Sourcing Journal that, at this juncture, it has not been legally obliged to serve as a joint employer for the workers the Teamsters have brought issues over.
Asaro-Angelo said the state won’t tolerate Amazon’s alleged misclassification any further.
“Amazon’s misclassification of Flex drivers is illegal–plain and simple. We will not allow Amazon to expand its empire by exploiting New Jersey workers and our state’s unemployment trust funds,” Asaro-Angelo said in a statement when announcing the state’s lawsuit. “Flex drivers deserve the dignity and respect of proper classification, ensuring they receive the benefits and rights they are entitled to. Classifying workers correctly is New Jersey law, there are no exceptions, regardless of the company size. We are bringing this action to protect New Jersey’s Flex drivers and our entire state.”
