Wisconsin Supreme Court Upholds Ruling That Amazon Flex Program Drivers Are Employees

An Amazon delivery worker sorts packages out for delivery in the financial district of New York City, on October 11, 2022. Brendan McDermid/Reuters

The Wisconsin Supreme Court on March 26 dismissed an appeal from Amazon arguing that the e-commerce giant can classify its delivery drivers as independent contractors.

The unanimous decision by the high court let stand a lower court ruling from April 2023 that found some delivery drivers in the Amazon Flex program were employees for purposes of unemployment insurance taxation—as the state Labor and Industry Review Commission argued—and not independent contractors as the online retail giant contended.

Amazon had appealed the 2023 ruling. However, in its decision (pdf), the Wisconsin Supreme Court dismissed Amazon’s appeal and called it “improvidently granted,” meaning the Supreme Court should not have reviewed the case.

Justice Ann Walsh Bradley, in a concurring decision, said the court dismissed the case filed by Amazon Logistics Inc., a subsidiary of Amazon because further review “would not serve any meaningful purpose” or any “further development of the law.”

The ruling upholds the 2023 decision by the Wisconsin Court of Appeals (pdf), which determined that drivers in the Amazon Flex program are part of the state’s unemployment insurance system and, therefore, are entitled to jobless pay if they are laid off.

Amazon May Owe Thousands in Unemployment Taxes

Amazon could now face a bill of more than $200,000 in delinquent taxes to Wisconsin’s unemployment insurance fund.

According to its official website, the Amazon Flex program allows individuals to use their own vehicle to deliver packages for Amazon “as a way of earning extra money to move you closer to your goals.”

Users download a smartphone application and use it to find “delivery opportunities that are convenient” for them, picking from “delivery blocks” in their area. They then head to a designated Amazon location to pick up the packages and use the app to navigate to each destination and deliver them.

After an Amazon Flex worker was fired in 2017 and filed for unemployment insurance, the Wisconsin Department of Workforce Development conducted an audit of more than 1,000 Amazon Logistics drivers between 2016 and 2018 and concluded the vast majority of drivers—more than 1,000— were employees, not independent contractors, and were therefore eligible for unemployment insurance payments.

The department told Amazon Logistics in 2018 that it owed more than $205,000 in unemployment insurance taxes, penalties, and interest to the state for workers who should have been counted as employees, the Wisconsin Examiner reports.

Amazon ‘Disappointed’ With Decision

In a statement to The Hill, Steve Kelly, a spokesperson for Amazon, said the company is “disappointed” with the Wisconsin Supreme Court’s decision.

“We hear from most of the Amazon Flex delivery partners that they love the flexibility of the program, and we’re proud of the work they do on behalf of customers every day,” Mr. Kelly said. “We’re disappointed that the Wisconsin Supreme Court declined to weigh in and provide much-needed guidance on these matters and are determining our next steps.”

However, the ruling was welcomed by labor unions who called it a “win for working people” and an “important victory in the fight to combat worker misclassification in Wisconsin and the United States.”

An Amazon delivery worker pulls a delivery cart full of packages in New York City, on June 21, 2021. Brendan McDermid/Reuters

“The Wisconsin Courts have made clear that Amazon drivers are employees under Wisconsin law. This means that Amazon Flex drivers are due additional rights and benefits including access to unemployment compensation,” Stephanie Bloomingdale, president of the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), said in a statement.

“Far too often, especially in the emerging gig economy, big and powerful companies like Amazon use the misclassification of employees as independent contractors to deny working people essential workplace rights like minimum wages, overtime pay, and unemployment insurance,” Ms. Bloomingdale added.

The Epoch Times has contacted an Amazon spokesperson for further comment.

The Associated Press contributed to this report.