Amazon says wage hike ‘more than compensates’ for loss of bonuses

Last week, Amazon addressed growing backlash against unfair warehouse wages by announcing plans to raise its minimum wage to $15 an hour. The news was largely lauded as a positive step by critics including Senator Bernie Sanders, who had helped push the company in that direction with strongly worded legislation. The move was still met […]

Last week, Amazon addressed growing backlash against unfair warehouse wages by announcing plans to raise its minimum wage to $15 an hour. The news was largely lauded as a positive step by critics including Senator Bernie Sanders, who had helped push the company in that direction with strongly worded legislation.

The move was still met with criticism by some, including Amazon workers who noted that, along with the wage increase, the retail giant would also be removing bonuses and stock grants. Employees vocalized their concern, causing Amazon to further address the move. The company sent a letter to Sanders insisting that employees would still come out on top.

“Again, all hourly operations and customer service employees will see an increase in their base pay, as well as in their total compensation,” Amazon SVP Jay Carney said in the letter, obtained by the Jeff Bezos-owned Washington Post. “We are also proud to continue to provide our industry-leading benefits, including comprehensive healthcare, up to 20 weeks of paid parental leave and our Career Choice program, which pre-pays 95 percent of associates’ tuition for courses in high-demand fields.”

The letter does on to explain that the the increase in wages “more than compensates” for the workers’ loss of benefit. Of course, the impact on individual workers is dependent on a number of factors, including how much they made prior to the increase. Those making, say, $14 an hour prior to the increase may only receive a $1 raise, which fails to make up for the loss of benefits.

The move appears to have a larger averse impact on long time employees of the company, though Amazon has vowed to reach out to workers to better explain the changes.

Update: Amazon has reached out to offer the full (lengthy) statement.

All hourly Operations and Customer Service employees will see an increase in their total compensation as a result of this announcement. The significant increase in hourly cash wages effective November 1 more than compensates for the phase out of incentive pay and future RSU grants.

In addition, because it’s no longer incentive-based, the compensation will be more immediate and predictable. Employees who have previous grants that are vesting in 2019 and 2020 are keeping those grants, so they will benefit from both the value of those shares when they vest and the new increase in cash compensation. Some employees have benefited from a bull market and the unusually strong appreciation of Amazon’s stock price in recent years. This is a good outcome for those employees, but such stock price appreciation is by no means guaranteed to continue. Stock markets and individual stocks can go up, but they can also go down. For employees who want to invest in stock for the possibility of future growth, we will be rolling out a direct stock purchase plan in 2019.

We moved quickly to get this information to our teams as fast as possible knowing there would be certain cases that would need to be adjusted between the announcement and November 1st when this new $15 minimum takes effect. As we have said throughout this process we have been adjusting site by site and person by person as needed since the announcement to ensure everyone experiences the benefit of this change.

Bernie Sanders intros ‘Stop Bad Employers by Zeroing Out Subsidies (BEZOS)’ bill

Bernie Sanders has never been one to mince words — and the past couple of weeks have found the independent senator from Vermont going toe to toe with some of the world’s largest and wealthiest companies. As promised, the 2016 presidential candidate introduced a bill aimed at ending what he’s deemed “corporate welfare.” Along with […]

Bernie Sanders has never been one to mince words — and the past couple of weeks have found the independent senator from Vermont going toe to toe with some of the world’s largest and wealthiest companies. As promised, the 2016 presidential candidate introduced a bill aimed at ending what he’s deemed “corporate welfare.”

Along with Congress member Ro Khanna (D-Calif.), Sanders has just introduced legislation titled Stop Bad Employers by Zeroing Out Subsidies (BEZOS). The senator held a press conference today in Washington, introducing the bill aimed at what he deemed “the great economic crisis in America today.”

“Despite low unemployment, we end up having tens of millions of Americans working at wages that are just so low that they can’t adequately take care of their family,” Sanders told the audience. “And today, we have the three wealthiest people in America who own more wealth than the bottom 50 percent.

The bill is designed to create a “100 percent tax on corporations with 500 or more employees equal to the amount of federal benefits received by their low-wage workers.”

As the name and much of Sanders’ recent rhetoric has suggested, he’s taking particular aim at Amazon head, Jeff Bezos.

“Jeff Bezos, the founder of Amazon, is the wealthiest person on Earth, and since the beginning of this year, his wealth has increased by about $260 million every day,” Sanders’ office wrote in a release. “Meanwhile, thousands of Amazon workers rely on food stamps because their wages are so low.”

For its part, Amazon called Sanders’ earlier statements “inaccurate and misleading,” adding, “While Senator Sanders plays politics and makes misleading accusations, we are expending real money and effort upskilling people with our Career Choice program.”

Amazon declined to comment on the story. 

Bernie Sanders fires back against Amazon, calling subsidy reliance ‘absurd’

Next week, Bernie Sanders will introduce legislation aimed firmly at large companies he believes have taken advantage of “corporate welfare” by underpaying employees. Amazon and Walmart in particular have bore the brunt of the Senator’s criticisms, and the rhetoric has become increasingly heated over the the past few days. Earlier today, Amazon accused Sanders of […]

Next week, Bernie Sanders will introduce legislation aimed firmly at large companies he believes have taken advantage of “corporate welfare” by underpaying employees. Amazon and Walmart in particular have bore the brunt of the Senator’s criticisms, and the rhetoric has become increasingly heated over the the past few days.

Earlier today, Amazon accused Sanders of issuing “inaccurate and misleading” statements as he called the company out of warehouse conditions. The Vermont senator has since responded with a release, calling Amazon fulfillment center wages “absurd.”

“Thousands of Amazon employees are forced to rely on food stamps, Medicaid and public housing because their wages are too low,” Sanders says, “including 1 out of 3 of its workers in Arizona and 2,400 in Pennsylvania and Ohio, according to The New Food Economy. Bottom line: the taxpayers of this country should not have to subsidize employees at a company owned by Mr. Bezos who is worth $155 billion. That is absurd.”

In an interview yesterday, Sanders told TechCrunch that the company had not been forthcoming with information about employment. The company shot back, noting that the Senator had yet to take it up on its offer of a warehouse tour.

“In terms of visiting a fulfillment center, last month I was visiting Wisconsin and requested to visit the fulfillment center in Kenosha,” Sanders says. “Unfortunately, Amazon could not accommodate me then. In September, I look forward to visiting the fulfillment center in Chester, Virginia, and working out the details with Amazon. We have heard from workers there, including Navy veteran Seth King, about unsafe working conditions and at least one person has reportedly died at the warehouse.”

Sanders, of course, is far from the first person to raise issue with Amazon fulfillment center conditions. Stories have been floating around from current and former employees for years. CEO Jeff Bezos, who has been front and center in Sanders’ criticism recently told the press, “I am very proud of our working conditions, and I am very proud of the wages that we pay.”

Amazon calls Bernie Sanders’ claims ‘inaccurate and misleading’

On September 5, Senator Bernie Sanders will introduce legislation aimed at curbing large companies like Amazon and Walmart’s “corporate welfare.” Amazon has unsurprisingly been on the offensive since the Vermont Senator called the company out by name. When we interviewed Sanders by phone yesterday, the retail giant provided us with a fairly standard comment, “encourage[ing] […]

On September 5, Senator Bernie Sanders will introduce legislation aimed at curbing large companies like Amazon and Walmart’s “corporate welfare.” Amazon has unsurprisingly been on the offensive since the Vermont Senator called the company out by name.

When we interviewed Sanders by phone yesterday, the retail giant provided us with a fairly standard comment, “encourage[ing] anyone to compare our pay and benefits to other retailers.” Today, however, it’s got something more substantial, and the company’s not mincing words here.

In a blog post titled “Response to Senator Sanders,” Amazon calls out what it claims are “inaccurate and misleading accusations” against the company. Sanders noted in our conversation that Amazon has been less than forthcoming with certain details, though the company says its been “in regular contact” with his office.

Yesterday a Sanders representative confirmed with TechCrunch by email that Amazon had offered the senator a tour of a fulfillment center. It was an offer Sanders planned to take the company up on, though no date has been set.

“While Senator Sanders plays politics and makes misleading accusations, we are expending real money and effort upskilling people with our Career Choice program,” the company writes. “Career Choice is an innovative benefit that pre-pays 95 percent of tuition, fees and textbooks (up to $12,000) for courses related to in-demand fields, regardless of whether they’re related to skills for jobs at Amazon or not. We have over 16,000 employees who have participated in Career Choice.”

Of course, the senator is hardly the first to levy such complaints against the company, as we noted yesterday. A recent story from Business Insider documents what it deems “horror stories” from inside some of the company’s warehouses. It’s a suggestion billionaire owner Jeff Bezos has roundly refuted, stating, “I am very proud of our working conditions, and I am very proud of the wages that we pay.”

Bezos, in particular, has received the brunt of Sanders’ criticism. The senator made income inequality a tentpole issue of his 2016 presidential campaign, and the focus has carried over to companies like Amazon. As has been noted, the median salary at the company is $28,444, less than Bezos makes every ten seconds.

Sanders’ bill is aimed at what he has deemed the corporate welfare of companies like Amazon and Walmart.

“It says: if you are a large company of 500 or more employees and you’re paying your workers wages that are so low that they have to go on food stamps, Medicaid, public housing, etc., then you have to pay taxes commensurate to how much the government is now spending for that assistance,” Sanders told TechCrunch. “It’s going to be the employer – the Jeff Bezos, the Walton family – who will pick up the tab for these public assistance programs, rather than the middle class of the country.”

Amazon’s response takes specific issue with Sanders’ use of “food stamps” in his complaints against the company

“In the U.S., the average hourly wage for a full-time associate in our fulfillment centers, including cash, stock, and incentive bonuses, is over $15/hour before overtime,” Amazon writes. “We encourage anyone to compare our pay and benefits to other retailers. Senator Sanders’ references to SNAP, which hasn’t been called “food stamps” for several years, are also misleading because they include people who only worked for Amazon for a short period of time and/or chose to work part-time — both of these groups would almost certainly qualify for SNAP.”

Bernie Sanders’ problem with Amazon

Vermont Senator Bernie Sanders is seeking additional information about the working conditions in Amazon warehouses in advance of legislation he’s preparing to introduce on September 5.  Income inequality was, after all, the centerpiece of Sanders’ 2016 presidential campaign. It was a populist message that resonated strongly with voters, giving the dark horse candidate a boost […]

Vermont Senator Bernie Sanders is seeking additional information about the working conditions in Amazon warehouses in advance of legislation he’s preparing to introduce on September 5. 

Income inequality was, after all, the centerpiece of Sanders’ 2016 presidential campaign. It was a populist message that resonated strongly with voters, giving the dark horse candidate a boost among concerned progressives and independents during a tooth and nail primary battle.

But while the message, perhaps, wasn’t enough to put him over the top, it’s a mission that’s remained central to Sanders’ work on Capitol Hill, finding him taking aim at some of the world’s largest corporations. In recent months, Amazon has been in the senator’s sights.

Earlier today, Sanders tweeted out a link asking employees of the online retail giant to share their experiences working for the company. The form allows current and former Amazon employees to share their stories either on the record or anonymously. It asks whether workers “struggle[d] with the demanding working conditions,” and whether they required public assistance.

In a phone call today, Sanders told TechCrunch that his office already knows enough about the working conditions in Amazon warehouses, but is seeking additional information as it prepares to introduce legislation on September 5.

“We know that the median salary for Amazon employees is about $28,000,” the Senator told TechCrunch. “And about half the workers who work for Amazon make less than $28,000 a year.”

It’s easy to see why the company has become a prime target for Sanders. A recent SEC filing put the median salary at $28,446 — less than owner Jeff Bezos makes every 10 seconds.

“We have every reason to believe that many, many thousands of Amazon workers in their warehouses throughout the country are earning very low wages,” Sanders explained. “It’s hard to get this information. Amazon has not been very forthcoming. From what information we’ve gathered, one out of three Amazon workers in Arizona, as we understand it, are on public assistance. They are receiving either Medicaid, food stamps or public housing.”

The Senator acknowledges that nothing about what Amazon is doing, on the face of it, is breaking any laws. But the discrepancy between its highest and lowest wage earners is enough for him to call into question why government subsidies are required to buoy those on the bottom rung. This is precisely what the proposed legislation aims to address.

Put simply, Sanders says we have every reason to believe that the richest man in the world can afford to pay employees more.

“The taxpayers in this country should not be subsidizing a guy who’s worth $150 billion, whose wealth is increasing by $260 million every single day,” said Sanders. “That is insane. He has enough money to pay his workers a living wage. He does not need corporate welfare. And our goal is to see that Bezos pays his workers a living wage.”

While Amazon is notoriously tight-lipped about matters these matters, the company has been on the defensive since the senator made it a kind of pet project. Amazon won’t comment directly on the forthcoming legislation until it’s made official, but the company did provide TechCrunch with comment regarding the blowback.

“We encourage anyone to compare our pay and benefits to other retailers,” an Amazon spokesperson told TechCrunch. “Amazon is proud to have created over 130,000 new jobs last year alone. These are good jobs with highly competitive pay and full benefits. In the U.S., the average hourly wage for a full-time associate in our fulfillment centers, including cash, stock, and incentive bonuses, is over $15/hour before overtime. That’s in addition to our full benefits package that includes health, vision and dental insurance, retirement, generous parental leave, and skills training for in-demand jobs through our Career Choice program, which has over 16,000 participants.”

Amazon further suggests that those interested in learning more about warehouse conditions book a tour of one of its fulfillment centers to “see for themselves.” 

A representative from Sanders’ office tells TechCrunch that Amazon invited the senator on a tour of a fulfillment center, and he plans to take the company up on the offer.

SAN FERNANDO DE HENARES, SPAIN – 2018/07/16: General view of the Amazon warehouse in San Fernando de Henares.

Of course, the concerns over Amazon’s treatment of workers aren’t new. Mother Jones ran an exposé of what it was like working as an Amazon warehouse slave in 2012. In 2013, Gawker published a series of emails from employees discussing life in fulfillment centers citing things like “unrealistic goals,” “very short breaks” and “below zero temps” in warehouses. A protestor cited by The Guardian in 2014 said it was better to be homeless than work for the retailer. And, most recently, Business Insider documented the “horror stories” faced by the Amazon warehouse workers, including nonstop surveillance and so little ability to take breaks, they couldn’t even use the facilities, when needed.  

Amazon has since been on something of a charm offensive in response to those PR headaches.

Last week, there was the odd phenomenon of an army of Twitter accounts claiming to be warehouse workers who were serving up similar talking points.

“Hello!” one wrote, cheerfully. “I work in an Amazon FC in WA and our wages and benefits are very good. Amazon pays FC employess [sic] ~30% more than traditional retail stores and offers full medical benefits from day 1. Working conditions are very good- clean/well lit- Safety is a top priority at my facility!”

That Amazon positions its own offerings as “highly competitive” can, perhaps, be seen as something of an indictment of larger issues with warehouse fulfillment. While the company is an easy target, it’s certainly not alone. And Sanders notes that his office is casting the net wider than just Amazon. Disney and Walmart have also been targeted by the senator.

In June, Sanders told a crowd at an Anaheim church, “I want to hear the moral defense of a company that makes $9 billion in profits, $400 million for their CEOs and have a 30-year worker going hungry. Tell me how that is right.” 

A month later, he took to Twitter to call out CEO Bob Iger directly, writing, “Does Disney CEO Bob Iger have a good explanation for why he is being compensated more than $400 million while workers at Disneyland are homeless and relying on food stamps to feed their families?”

Earlier this week, however, Disney reached an agreement with the Walt Disney World union to pay workers a $15 minimum wage.

“We’ve seen real progress at the Disney corporation,” Sanders told TechCrunch, “and I believe that Jeff Bezos can play a profound role in American society today if he were to say, ‘yes, I’m the richest guy in the world. I will pay my workers a living wage at least $15 and make sure all of my workers have the security and dignity they need. I will improve conditions.’”

Amazon and Walmart, meanwhile, remain the two key targets for the impending legislation. With Democrats in the minority in the U.S. Senate, it seems unlikely that a hearing will be called where Bezos would be asked to testify à la Mark Zuckerberg, but the senator plans to go ahead with the legislation next week, regardless.  

“That legislation is pretty simple,” explained Sanders. “It says: if you are a large company of 500 or more employees and you’re paying your workers wages that are so low that they have to go on food stamps, Medicaid, public housing, etc., then you have to pay taxes commensurate to how much the government is now spending for that assistance. It’s going to be the employer – the Jeff Bezos, the Walton family – who will pick up the tab for these public assistance programs, rather than the middle class of the country.”

The lobbying is fast and furious as gig companies seek relief from pro-labor Supreme Court ruling

For four years, Edhuar Arellano has left his house at 7 a.m. on weekdays to drive customers around the Bay Area for Lyft and Uber. Most days, he doesn’t get home to Santa Clara until 11 p.m. On weekends, he delivers pizzas to make ends meet.

For four years, Edhuar Arellano has left his house at 7 a.m. on weekdays to drive customers around the Bay Area for Lyft and Uber . Most days, he doesn’t get home to Santa Clara until 11 p.m. On weekends, he delivers pizzas to make ends meet.

Like a lot of drivers plugging in to ride-hailing apps for work, he likes the flexibility the gig economy has offered. But given the choice, Arellano says he wishes he could just become an employee. That would get him paid vacation, benefits, overtime, his own health insurance and perhaps more say over his working conditions.

“We need to accept whatever they want,” said the 55-year-old father of two grown children. “I can’t control anything.”

That quandary is behind a ferocious battle quietly playing out in the state Capitol in the final days of the legislative session, which ends August 31. Lobbyists for ridesharing companies and the California Chamber of Commerce are scrambling to delay until next year (and the next governor’s administration) a far-reaching California Supreme Court decision that could grant Arellano’s wish — and, businesses fear, undermine the entire gig economy.

The April ruling, involving the nationwide delivery company Dynamex Operations West Inc. and its contract drivers, established a new test for enforcement of California wage laws, and made it much harder for companies in California to claim that independent contractors are not actually employees.

Though the ruling only applies to California, the state’s labor force is so huge that it has already had national impact. Shortly after the decision, U.S. Senator Bernie Sanders of Vermont introduced a bill to make a version of California’s new rule the federal standard, a move that only added urgency to employers’ calls for state lawmakers to hit the pause button on implementing the ruling.

“Businesses are very concerned. The key is who’s going to be sued here in the near future,” said Allan Zaremberg, president of the California Chamber, which represents 50,000 businesses.

They should be, says labor leader Caitlin Vega, who has been similarly lobbying Capitol Democrats to refrain from meddling and let the Supreme Court decision move forward.

“Companies have made so much money already at the expense of workers,” Vega, the legislative director of the California Labor Federation, said Tuesday during a harried break between Capitol meetings. “We really see the Dynamex decision as core to rebuilding the middle class.”

State and federal labor laws give employees a wide range of worker protections, from overtime pay and minimum wages to the right to unionize. But those rights don’t extend to independent contractors, whose ranks have grown dramatically in the gig economy.

Apps such as Uber, TaskRabbit and DoorDash, which match customers and services online and in real time, have given workers an unprecedented ability to freelance but they also have blurred traditional employer-employee relationships and, labor advocates say, invited exploitation.

Some 2 million people, from Lyft drivers to construction workers, consider themselves independent contractors in California. In 2017, according to the Bureau of Labor Statistics, about one in 14 workers was an independent contractor nationally.

If state lawmakers don’t rewrite the law or stall its implementation for a few months, as businesses want — which the Legislature can legally do, though the clock is ticking — the Dynamex decision will subject businesses in California to a standard that is tougher than the federal government’s or most states’.

Known as the “ABC test,” the standard requires companies to prove that people working for them as independent contractors are:

  • A) Free from the company’s control when they’re on the job;
  • B) Doing work that falls outside the company’s normal business;
  • C) And operating an independent business or trade beyond the job for which they were hired.

That’s a high bar for the many companies whose bottom lines have depended on large numbers of contractors to deliver a particular service. According to the business lobby, in the months since the Dynamex decision, law firms have received 1,200 demands for arbitration and 17 class action lawsuits.

Last month, business leaders sent a letter to members of Gov. Jerry Brown’s administration, warning that the new test would “decimate businesses,” and urging the governor and Legislature to suspend and then limit the court’s ruling to only workers involved in the Dynamex case. The letter also asked that the decision not apply to other contractors for the next two years.

Not all those contractors are in tech, Chamber head Zaremberg points out. Emergency room doctors and accountants, for example, could also be impacted. Emergency hospitals and trauma centers contract their doctors through medical groups, and doctors generally work at a combination of hospitals and community clinics.

Photo: shapecharge / iStock / Getty Images Plus

Dr. Aimee Mullen, president of the California chapter of American College of Emergency Physicians, confirms that ER docs are among those uncertain about their contractor status.

“A lot of our members use that model. It’s choice. They like flexibility. They like working at multiple hospitals,” Mullen said.

The California Labor Federation’s Vega contends that, disruptive though it may be, the Dynamex ruling is the right one, particularly on worker exploitation. The core group affected tends to be low-income and immigrant workers, she said.

“The Dynamex decision was a victory for working people — truck drivers who are cheated out of wages, warehouse workers forced to risk their health and gig economy workers who want to be treated with dignity and respect,” Vega wrote in a Sacramento Bee op-ed.

Some workers see room for hybrid solutions. Edward Escobar, a San Francisco ride-hail driver of four years and founder of the Alliance for Independent Workers, a group formed by drivers three years ago, says he has seen a big decrease in how much these companies compensate drivers without a commensurate increase in control over working conditions.

Escobar believes gig companies are trying to have it both ways, and should give their workers either true independence or full employment. His proposal: Let workers choose their own classification, with wage and benefit protection for those who choose to be employees, and more control for contractors over which rides to take and what prices to set.

“These tech titans have been taking advantage of these gray areas,” Escobar said.

Assembly Speaker Anthony Rendon, a Paramount Democrat, said earlier this month that while the Legislature is eager to delve into workforce issues, leaders do not have adequate time to act on it before the session ends next week.

“The Dynamex​ decision strikes at the core of what the future of work looks like in our society,” Rendon said in a statement. “From the decline of union membership to court rulings like the Janus decision, we’ve seen the continual erosion of workers’ rights. If the Legislature is to take action, we must do so thoughtfully with that in mind. That will not happen in the last three weeks of the legislative session.”

Nor are the stakes likely to be lowered for workers like Arellano.

“If I don’t work, I have no money,” said the Lyft and Uber driver. “Everything is so expensive in Santa Clara and the Bay Area.”

CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.