'Gig behemoths are on notice': Amazon, others ordered to pay $27.20 minimum wage to delivery drivers in Australia

Economics
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Companies that hire contractor delivery drivers in New South Wales, Australia, will have to pay a minimum wage of $27.20 per hour over the next three years beginning March 1. | Pexels/Norma Mortenson

The Australian state of New South Wales recently ordered that contractor employees providing freelance delivery services for companies be paid a minimum rate.

This is the first major jurisdiction to make such a requirement, according to a Reuters report. The ruling affects companies large and small that hire causal delivery drivers with cars that weigh less than 2 tons.

"Gig behemoths are on notice: this is what happens when workers call out these dangerous bottom feeders and fight together for a fair day's pay," Transport Workers' Union (TWU) National Secretary, Michael Kaine, said in the report.

"For too long the likes of Amazon have been able to exploit independent contractor loopholes to sidestep rights and rip workers of fair rates of pay," Kaine added.

Beginning March 1, the three-year phase in process will require companies pay a minimum wage equivalent to $27.20 per hour to freelance delivery drivers, Reuters reported.

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." The spokesperson added that Flex drivers with a sedan already make more than the now-required rate.

Amazon has come under fire over the past few years for perceived disregard of worker safety and labor laws, Reuters reported.

In 2021, the United States Federal Trade Commission required Amazon to pay $61.7 million to reimburse drivers for tips the company was accused of stealing, according to Reuters.

"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 TWU Commissioner, Damian Sloan, Reuters reported.

The COVID-19 pandemic has driven sharp increases in online commerce, causing shares of Amazon to almost double in the last two years, the report stated.