Amazon hit with $5.9 million fine as California says it failed to disclose quotas to workers

By Bill Peters

'Undisclosed quotas expose workers to increased pressure to work faster and can lead to higher injury rates and other violations by forcing workers to skip breaks,' state labor commissioner says

Amazon.com Inc. has been fined $5.9 million by a California labor agency accusing the online retailer of failing to sufficiently disclose productivity quotas to employees at two warehouses in the state, in violation of a law intended to prevent worker injuries.

The state labor commissioner's office alleged that Amazon (AMZN), at warehouses in Moreno Valley and Redlands, did not meet the requirements of a 2022 law that requires warehouse operators to give workers written notice of any work-related quotas they need to hit and any punishment that might result from falling short of those targets.

The agency said that Amazon failed to provide that written notice.

"Undisclosed quotas expose workers to increased pressure to work faster and can lead to higher injury rates and other violations by forcing workers to skip breaks," California Labor Commissioner Lilia Garcia-Brower said in a release on Tuesday.

Amazon, in a statement, said disagreed with the labor agency's allegations and had appealed the decision. It said it did not have "fixed quotas."

"At Amazon, individual performance is evaluated over a long period of time, in relation to how the entire site's team is performing," Maureen Lynch Vogel, an Amazon spokesperson, said in an email.

"Employees can - and are encouraged to - review their performance whenever they wish," that statement continued. "They can always talk to a manager if they're having trouble finding the information."

As Amazon has grown over the years into a trillion-dollar company, it has faced criticisms from workers and labor advocates over work conditions and standards, which they say leave warehouse workers and drivers scrambling with little time for breaks.

Federal scrutiny over the company's safety practices has also intensified. Members of the Amazon Labor Union, which represents thousands of workers at a warehouse in Staten Island, voted to affiliate with the Teamsters, according to an announcement on Tuesday. Chris Smalls, the president of the Amazon Labor Union, said the support of the Teamsters would help the union secure a contract. Amazon has put up stiff resistance to that unionization drive and a handful of efforts to unionize elsewhere in the U.S.

Meanwhile, in California - whose Inland Empire region lies close to two massive ports and has undergone a boom in warehouse construction - indoor and outdoor workers at warehouses and other distribution facilities have had to do their jobs under the threat of increasingly severe weather.

"Amazon management really makes people stress about rate," Carrie Stone, an Amazon warehouse worker in Moreno Valley, said in a statement Tuesday from the nonprofit Warehouse Worker Resource Center. "If you don't scan enough items you will get written up. This happened to me. I got written up for not making rate. They said I missed by one point, but I didn't even know what the target was."

The Warehouse Worker Resource Center, a California advocacy group, said the citations were among the first under the 2022 law that had been issued by the labor commissioner's office. Those citations, it said, reflected penalties of more than $1.2 million at the warehouse in Redlands and nearly $4.7 million at the one in Moreno Valley.

The group also noted that similar measures are in force in states like Minnesota, New York, Oregon and Washington.

The California labor commissioner's office said it began looking into the issues at the Amazon warehouses in September 2022 and found thousands of violations. Amazon, it said, argued that it didn't need a quota system because it used peer-to-peer evaluations.

"However, this law defines a quota as work that must be performed at a specified speed or the worker suffers discipline," the agency's release said. "It also places limits on quotas that prevent compliance with meal or rest periods, use of bathroom facilities, or compliance with occupational health and safety laws."

Meanwhile, Wall Street continues to cheer Amazon's quarterly financials. Shares of Amazon are up 20.1% year to date but were down 0.8% on Tuesday.

-Bill Peters

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06-18-24 1613ET

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