| 23 April 2024, Tuesday |

Australian state sets minimum pay for Amazon contractors in landmark step

The state of New South Wales in Australia required employers of freelance delivery drivers, such as Inc, to pay a minimum wage, a decision heralded by a union as the world’s first to compel the retailer to observe such regulations.

The law, which goes into effect on March 1 and will be phased in over three years, mandates enterprises who hire drivers with their own small cars to pay a minimum of A$37.80 ($27.20) per hour in Australia’s most populous state.

According to the Transport Workers’ Union (TWU), this makes the state, the hub of Amazon’s activities in Australia, the first site where the ecommerce giant must pay legal salaries to contractors.

“Gig behemoths are on notice: this is what happens when workers call out these hazardous bottom feeders and fight together for a decent day’s wage,” said Michael Kaine, the union’s national secretary.

“For too long the likes of Amazon have been able to exploit independent contractor loopholes to sidestep rights and rip workers off fair rates of pay,” he added in a statement.

An Amazon spokesperson said the company was “pleased to continue offering Amazon Flex delivery partners competitive pay as well as the flexibility to work when it suits them”.

Flex drivers with a sedan in New South Wales already earned more, on average, than the enforceable rate that would take effect from March 1, the spokesperson added.

The minimum wage ruling applies to all companies which hire casual delivery drivers with cars weighing less than two tones, according to the New South Wales Industrial Relations Commission ruling, which was reviewed by Reuters. Amazon is the dominant employer of small car drivers with thousands of contractors in the state, the union says.

Shares of the $1.6-trillion company have nearly doubled in value over the past two years, as the COVID-19 pandemic prompted a rush to online shopping.

But it has faced scrutiny over perceptions that it takes a hands-off approach to front-line worker safety and labor laws in the countries where it operates.

Last year, the U.S. Federal Trade Commission ordered Amazon to pay $61.7 million to reimburse Flex drivers for tips it was accused of stealing.

Since Flex launched in Australia in 2020, drivers, who use their own vehicles to deliver by deadline packages picked up from Amazon distribution centers, have received varying amounts set by the company as they are not technically employees.

Friday’s ruling by the New South Wales Industrial Relations Commission confirms that it is possible for all workers to have access to enforceable rights and protections, regardless of employment status, the TWU said.

“Having regard to the parties’ submissions and evidence, I am satisfied that the variations proposed…would result in fair and reasonable conditions for the contract carriers to whom they apply,” wrote commissioner Damian Sloan in the ruling.

  • Reuters