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In a significant crackdown on gig economy practices, Walmart is being held accountable for systemic wage deception. The $100 million settlement underscores the retail giant's failure to be transparent with its workforce, allegedly siphoning off earnings that drivers relied on. By misleading both workers about their pay and customers about where their tips were going, the company prioritized corporate gain over the livelihood of its delivery partners.
Walmart said it was improving its systems to "ensure fairness and transparency" and had already started making payments to people who had been affected.
Delivery drivers are due to receive $79m worth of payouts from the settlement, according to FTC leaders.
"We value the hard work and dedication of the drivers who deliver great service and products to our customers," the company said in a statement.
Walmart launched its Spark Driver service in 2018, as it pushed to make its online ordering and delivering services more competitive. More than a million different people have since made deliveries for the firm via the app, which ranks as one of the largest last-mile delivery services in the US.
The FTC said discrepancies between the pay the company told drivers they could expect and what they actually received arose consistently in certain scenarios, such as when the company split up customer orders into multiple deliveries or changed how packages were distributed among delivery jobs.
The problems date back to at least 2021 and have prompted thousands of complaints, becoming "known problems" within Walmart, according to the claim, which was filed in federal court in California.
"Rather than address these well-known issues, however, Walmart has persisted in these practices and continues to attract and retain drivers and customers to Spark with false earning claims and misleading representations," it said.
FTC leaders said Walmart started repaying drivers after the agency approached the company with its concerns last year.
Walmart also agreed to pay $10m to the FTC and $11m to the states.
