Walmart has agreed to pay approximately $16.2 million to drivers for its Spark delivery service as part of a larger $100 million settlement with the Federal Trade Commission (FTC). The settlement resolves allegations that the retail giant misled gig workers about their potential earnings and the handling of customer tips.
The FTC announced the agreement on Thursday, stating that Walmart had falsely claimed drivers would earn more in base pay than they actually received. The regulator also accused the company of misleading drivers "by falsely claiming that 100% of customer tips would actually go to drivers."
Drivers Notified After Delivery or Not At All
According to the FTC's complaint, Walmart frequently failed to notify Spark drivers about reductions in their base pay or changes to their tip earnings. "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 agency stated.
The proposed settlement establishes a "driver fund" to distribute the $16.2 million to affected workers. The payouts apply to delivery offers made to drivers dating back to 1 January 2021.
Hidden Practices on Tip Handling
The FTC's investigation revealed further problematic practices. Walmart "failed to notify drivers that, unlike the payment for the goods being delivered, the payment for the advertised tip amount had not been preauthorised." This meant drivers would not receive the tip if a customer's payment failed.
Additionally, the company sometimes split a single customer's tip across multiple drivers when an order required multiple deliveries, a practice it also failed to disclose to workers.
Walmart's Response and Previous Actions
A Walmart spokesperson said the company 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 added. "We are continuously improving procedures to ensure fairness and transparency for drivers."
This follows action taken by Walmart last year, when it sent surprise tip payments—some worth hundreds of dollars—to some Spark drivers after identifying workers who had not received full tip payments in the past.
Broader Gig Economy Context
Walmart is not the only company in the delivery sector to face allegations over tip handling. Last year, DoorDash agreed to pay $16.75 million to 60,000 of its delivery workers in New York state to settle claims that it used customer tips to offset workers' base pay.
The FTC's case against Walmart highlights ongoing regulatory scrutiny of pay transparency and fair treatment within the gig economy, where companies rely on independent contractors for last-mile delivery services.