Amazon drops $2 coronavirus pay rise for warehouse workers as CEO Jeff Bezos' fortune nears $150 billion
- This week Amazon warehouse workers lost a $2 pay bump brought in to reward them for coming in during the coronavirus pandemic.
- Amazon has now phased out two major policies brought in to protect workers, the other being that they could take unlimited amounts of unpaid time off without being penalized.
- The apparent return to normalcy is at odds with the experiences of warehouse workers who told Business Insider they still feel in danger coming to work.
- Amazon said its starting wage was higher than competitors in retail, and that it had paid out approximately $800 million extra to staff since the beginning of the pandemic.
- CEO Jeff Bezos maintains his position as the world's richest person, with his fortune nearing $150 billion.
- Do you work at Amazon? Got a tip? Contact this reporter at ihamilton@businessinsider.com or iahamilton@protonmail.com.
- Visit Business Insider's homepage for more stories.
The retail giant initially struggled to cope with a sudden spike in online orders brought on by coronavirus lockdowns around the world, and during its first-quarter earnings call the company announced it had seen its highest sales growth in over three years. But three months into lockdown, Amazon seems to have got a handle on its operations.
As its supply chain steadies, the company is reversing policies introduced earlier in 2020 to protect its workers from the coronavirus fallout. Even as these measures fall away, the virus continues to spread inside Amazon's warehouses in Europe and in the US, staffers say.
On Monday, Amazon eliminated one of the policies brought in to reward frontline workers for continuing to come into work during the crisis — a $2-per-hour rise in pay. The wage rise was always temporary, and the company announced earlier in May that its $2 hazard pay would finish at the end of the month.
In April, it phased out a second policy of allowing workers to take unlimited time off (UPT) to allow them to stay home if they felt unsafe coming to work. This was an extraordinary move for the retail giant, since prior to the pandemic workers told Business Insider that using more than your allotted amount of UPT (80 hours per year) could result in immediate termination.
The US remains one of the worst-hit countries globally by the pandemic, with more than 1.8 million confirmed cases of COVID-19 and over 105,000 deaths. While the growth rate of the virus appears to have stabilized, experts warned outbreaks in individual states are possible.
As of mid-May eight Amazon workers are confirmed to have died, and over a hundred warehouses have confirmed cases according to news reports. The company has consistently refused to publish official figures on exactly how many of its employees are confirmed to have tested positive for the virus.
Business Insider spoke to six Amazon workers about the return to normal pay amid abnormal conditions. All requested anonymity for fear of retaliation from the company.
'They should actually be increasing it'
Several Amazon warehouse workers who spoke to Business Insider said the pay cut won't make much difference to their livelihoods. The $2 was only a small increase to begin with, they said, amounting to an extra $80 per week for someone working a 40-hour week.Amazon's starting pay for warehouse workers is $15 per hour, meaning since March when the wage hike was introduced that has gone up to $17 per hour.
"The two dollars an hour won't have much effect on my life, I find [it] kind of laughable. There are others though who can really use it and with the present circumstances they should actually be increasing it instead of taking it away," said one New Jersey-based worker.
Even those for whom the loss of $80 a week isn't make-or-break say the cut is disheartening.
"It just kills me that the company cares nothing about what a pay cut will do to morale," said one South Carolina worker.
The same worker said if Amazon had shut down warehouses to shield its staff, employees would have been eligible to claim unemployment. They said this may have meant more income given the $600 federal boost to unemployment payments introduced in April.
That boost is due to come to an end in July, and at the moment it means roughly half of US workers can earn more in unemployment than from their regular salaries.
"Almost everyone is very disappointed and angry," said one Indiana worker whose warehouse now has over 30 confirmed cases. "We want the pay until the masks go away," they added.
Amazon brought in a policy requiring employees to wear masks to work in April, though it warned its supplies were "limited."
An Amazon spokeswoman said wearing masks is recommended by the Centers for Disease Control.
She added that Amazon's $15 starting hourly pay for warehouse workers, introduced in 2018, is better than the retail competition.
Target's minimum wage is currently $13 an hour, although it's due to rise to $15 by the end of 2020.
"To thank employees and help meet increased demand, we've paid our team and partners nearly $800 million extra since COVID-19 started while continuing to offer full benefits from day one of employment," she said. "With demand stabilized, we've returned to our industry-leading starting wage of $15 an hour. We're proud that our minimum wage is more than what most others offer even after their temporary increases in recent months, and we hope they'll do the right thing for the long term and bring their minimum pay closer to ours."
But for some, the danger inside warehouses seems far from abating, and a lack of communication from management makes them fearful that the danger level could be higher than they know.
As coronavirus cases spread to the US, Amazon began to notify workers about cases in their warehouses via text, telling them when a worker who tested positive for COVID-19 was last on-site. At first, the company notified workers about each new case, but as it started to spread more voraciously at some sites it stopped giving specific numbers, as reported by the New York Times.
Workers told Business Insider communication can be sporadic.
One California worker told Business Insider they received a text on May 18 notifying them a confirmed case had been on-site on April 7. "Not only should we continuing receiving the hazard pay but we deserve more than $2," the same worker added.
"They just notify us of a new case but don't provide what shift or department involved," said one Tennessee-based warehouse worker. "They say they reach out to people they can verify via camera who were close to the infected person."
"[Their] policy is to wait and see who gets infected, report it via text or call and carry on with business as usual. It's sad," they added.
An Amazon spokeswoman, asked how the firm monitors the spread of the virus, said: "Our top concern is ensuring the health and safety of our employees, and we expect to invest approximately $4 billion from April to June on COVID-related initiatives to get products to customers and keep employees safe."
She continued: "This includes spending more than $800 million in the first half of the year on COVID-19 safety measures, with investments in personal protective equipment, enhanced cleaning of our facilities, less efficient process paths that better allow for effective social distancing, higher wages for hourly teams, and developing our own COVID-19 testing capabilities, etc."
Not always enough work to go around
In some warehouses, the company appears to have been able to manage demand sufficiently that it's now asking workers to take time off.The Indiana worker told Business Insider that in their warehouse managers are offering voluntary time off or "VTO."
The way VTO works is workers get sent a text offering unpaid time off when the warehouse has an ebb in demand.
They then log in through the employee portal, an app called A to Z, to claim which days they want on a first-come first-served basis.
The worker told Business Insider the offer of VTO generally runs out within about 15 minutes of going out, with workers especially eager to snap up the time off now that their unlimited UPT has been cut.
Not all of Amazon's warehouses are at overcapacity. To keep up with demand Amazon went on an initial 175,000 worker hiring spree, and in some locations this process seems to be continuing. One UK-based worker said their warehouse is still recruiting temporary contract workers on rolling contracts.
This week more news emerged that Amazon is trying to rejuvenate business for sellers damaged by the coronavirus. The company is reportedly planning a summer sale to "drive excitement and jump-start sales," per a company notice seen by CNET.
Meanwhile Amazon CEO Jeff Bezos' fortune continues to climb. According to the Bloomberg Billionaires Index, Bezos has added $32 billion to his wealth since January, and is now worth $149 billion.
Do you work at Amazon? Got a tip? Contact this reporter at ihamilton@businessinsider.com or iahamilton@protonmail.com.
SEE ALSO: 'It's a slap in the face': Amazon is handing out 'Thank you' t-shirts to warehouse workers as it cuts their hazard pay
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