Australia’s NSW orders minimum pay for Amazon employees in landmark step

The state of New South Wales in Australia has ordered employers of freelance delivery drivers, such as Amazon.com Inc, to pay a minimum wage, making it the world’s first jurisdiction to compel the retailer to observe such regulations, according to a union.

From March 1, enterprises that hire drivers with their own small vehicles must pay a minimum of A$37.80 ($27.20) per hour in Australia’s most populous state, which will be phased in over three years.

According to the Transport Workers’ Union (TWU), this puts the state, which is home to Amazon’s Australian operations, the first place where the ecommerce giant must pay lawful wages to contractors.

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

“For far too long, companies like Amazon have been able to take advantage of independent contractor loopholes to circumvent labour laws and rob workers of fair pay,” he added in a statement.

“We’re thrilled to continue offering Amazon Flex delivery partners competitive pay and the flexibility to work when it suits them,” an Amazon spokeswoman stated.

In New South Wales, flex drivers who drive a sedan already earn more on average than the enforceable rate that will take effect on March 1, according to the spokeswoman.

According to the New South Wales Industrial Relations Commission judgement, which was reviewed by Reuters, the minimum wage ruling applies to all enterprises that engage casual delivery drivers with cars weighing less than two tonnes. According to the union, Amazon is the state’s largest employer of small car drivers, employing thousands of independent contractors.

Over the previous two years, the $1.6 trillion company’s stock has virtually doubled in value as the COVID-19 outbreak triggered a rush to internet buying.

However, it has come under fire for allegations that it ignores front-line worker safety and labour rules in the nations where it operates.

The US Federal Trade Commission ordered Amazon to pay $61.7 million to Flex drivers to compensate for tips it was accused of skimming last year.

As drivers who use their own vehicles to transport by deadline items picked up from Amazon distribution centres have gotten varied amounts determined by the company since Flex arrived in Australia in 2020, they have received varying amounts set by the company as they are not technically employees.

The New South Wales Industrial Relations Commission’s decision on Friday reinforces that all workers, regardless of employment status, have access to enforceable rights and safeguards, according to the TWU.

Commissioner Damian Sloan noted in the judgement, “Having regard to the parties’ submissions and evidence, I am persuaded that the adjustments proposed…would result in fair and reasonable conditions for the contract carriers to whom they apply.”

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