Amazon Gives $500M Coronavirus Bonus to Workers—But There’s a Hidden Cost

Workers could have earned more had Amazon not cancelled coronavirus pay raises.

Amazon quietly ended its coronavirus hazard pay in May. Scott Olson/Getty Images

In another attempt to quell growing labor tension and revert its reputation as a coronavirus sweatshop during the pandemic, Amazon (AMZN) said on Monday it will give a one-time bonus totaling $500 million to its warehouse employees, delivery partners, drivers and other frontline workers as a token of appreciation for their work in June.

Full-time warehouse, Whole Foods and delivery employees will get a $500 cash bonus, while part-time employees will receive $250. Whole Foods store managers will get $1,000; owners of Amazon’s third-party delivery services will get $3,000; and contract drivers of Amazon’s own delivery service, Flex, will receive $150 if they worked more than 10 hours in June.

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“My thanks and gratitude for the truly remarkable commitment to customers you have shown throughout this journey. I have never been more proud of our teams,” Dave Clark, Amazon’s senior vice president of retail operations, said in an open letter to employees on Monday.

However, what Amazon didn’t highlight in Monday’s generous announcement is that the company is no longer paying warehouse workers extra hourly wages and doubled overtime rates.

In March, April and May, Amazon offered all warehouse, Whole Foods and delivery workers a $2 per-hour raise and double overtime pay (from 1.5 times overtime pay before) to keep them around when COVID-19 was ravaging the country and Amazon’s safety measures had yet to catch up.

Amazon said those incentives were introduced to help meet increased demand during the national lockdown. So when business started to stabilize in May, partly as a result of states reopening, Amazon ended those perks.

According to tech jobs salary tracker PayScale, Amazon pays an average hourly rate of $16.4 to warehouse and fulfillment center workers. Had the coronavirus pay increases not been cancelled, a typical full-time warehouse employee would have earned as much as the $500 one-time bonus by 40 hours a week plus 10 hours of overtime in June. 

An Amazon spokesperson told CNBC in May that the company had spent nearly $800 million on increased pay for hourly employees and partners during the pandemic. So all in all, the $500 million one-time bonus looks more like a cost-saving measure than extra spending from a budgeting perspective.

And great PR. “That’s the best ad ever by Amazon,” commented a Twitter user under a news report about the bonus.

Reaction to Amazon’s check size was mixed. While some welcomed the offer as being “better than nothing,” those who compare it with Jeff Bezos’ cosmic fortune called it “peasant meal.”

“Jeff’s worth increased more than $24 billion during the [shutdown]. They helped them make that much and he’s giving them just $500. How generous,” a Twitter user commented ironically.



Amazon Gives $500M Coronavirus Bonus to Workers—But There’s a Hidden Cost