Walmart Agrees to Pay $100 Million Settlement Over Driver Tip Allegations

Walmart will pay $100 million to settle federal charges that it misled delivery drivers about their earnings, according to an announcement from the Federal Trade Commission on Thursday. The settlement addresses allegations that the retail giant deceptively handled customer tips and misrepresented pay information in its Spark Driver delivery program.

The FTC’s complaint, filed jointly with 11 states including South Carolina, accused Walmart of falsely telling customers that all tips would go directly to drivers. Instead, the commission found that the company retained portions of those tips. Additionally, the complaint alleged that Walmart showed inflated base pay and tip amounts to drivers, leading to tens of millions of dollars in lost earnings.

Under the terms of the settlement, Walmart must not only pay the $100 million judgment but is also prohibited from misrepresenting earnings in future delivery offers made to Spark drivers.

“Labor markets cannot function efficiently without truthful and non-misleading information about earnings and other material terms,” said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, in the statement released by the commission.

The Spark Driver program is Walmart’s in-house delivery network, launched in 2018 as part of the company’s strategy to compete with Amazon and other e-commerce players in the rapidly growing home delivery market. The program utilizes gig workers, similar to DoorDash or Instacart, to fulfill deliveries from Walmart stores to customers’ homes.

In response to the settlement, a Walmart spokesperson stated that the company had already begun issuing payments to affected drivers and would continue making additional payments as appropriate. “We value the hard work and dedication of the drivers who deliver great service and products to our customers,” the spokesperson said. “We are continuously improving procedures to ensure fairness and transparency for drivers.”

The case highlights growing regulatory scrutiny of gig economy practices, particularly regarding how companies communicate earnings potential to workers. The FTC emphasized that protecting workers remains a top priority and urged companies offering gig work to maintain transparency and accuracy in their communications with workers.

This settlement is part of a broader trend of regulatory actions targeting major retailers and gig economy platforms. In recent years, several delivery and ride-sharing companies have faced similar allegations regarding misrepresentation of driver earnings and tip handling.

For Walmart, the $100 million settlement comes as the retail giant continues to expand its e-commerce and delivery operations. The company has invested heavily in building out its delivery infrastructure to meet growing consumer demand for convenient home delivery options, especially following the acceleration of online shopping during the pandemic.

Industry experts note that transparent payment structures are increasingly important for attracting and retaining gig workers in a competitive labor market. Many delivery platforms have adjusted their tipping and pay disclosure policies following public scrutiny and legal challenges.

The FTC’s action serves as a warning to other companies in the gig economy space that regulatory bodies are closely monitoring payment practices and representations made to workers. The commission specifically called on companies to implement “robust compliance systems” to ensure accuracy in how they present earnings opportunities.

The settlement amount of $100 million makes this one of the larger penalties imposed on a retailer for labor-related violations in recent years, signaling the seriousness with which regulators view misrepresentations in the growing gig economy sector.