Walmart has agreed to pay $100 million to settle allegations that it deceived its delivery drivers about pay, costing them tens of millions of dollars in earnings.

The case, brought by the Federal Trade Commission and 11 states, accused the retailer of misleading workers about the base pay, incentive pay and tips they could earn, the agency said in a press release on Thursday.

A Walmart spokesperson told CBS News that it has issued payments to impacted workers and will continue to make payments “as appropriate.”

Walmart, the largest retailer in the world, relies on its network of drivers to extend its reach, offering grocery and product deliveries from thousands of its stores.

FTC allegations

The FTC’s complaint alleges that Walmart made false claims to workers who are part of its Spark Delivery network since 2021. 

The Spark Program, launched in 2018, allows gig workers to sign up to make deliveries for Walmart. Spark drivers can also perform tasks for other retailers, such as Home Depot and 1-800-Flowers.

The FTC said the program’s drivers typically decide whether accept delivery “offers” via the Spark app based on what they expect to earn. However, the agency alleges that because Walmart failed to disclose certain details, the retailer effectively misled drivers on how much they could earn in base pay and through tips. 

For example, when Walmart uses multiple drivers to complete a single order, it still displays the full tip amount to each driver, when in reality the retailer splits the tip across all drivers, the FTC alleges.

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

The FTC’s complaint also alleges that Walmart deceived customers by falsely claiming that 100% of customer tips would actually go to drivers.

The FTC claims Walmart was aware of these issues but did nothing to address them. The agency said Walmarts actions run afoul of FTC guidelines, federal law and several state laws.