Amazon drops $2 coronavirus pay rise for warehouse workers as CEO Jeff Bezos' fortune nears $150 billion

Former Amazon employee, Christian Smalls, stands with fellow demonstrators during a protest outside of an Amazon warehouses in the Staten Island borough of New York on May 1, 2020.REUTERS/Lucas Jackson
  • 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 normality is at odds with the experiences of warehouse workers who told Business Insider they still felt in danger coming to work.
  • Amazon said that its starting wage was higher than its retail competitors' and that it had paid out approximately $800 million extra to its 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.

The coronavirus pandemic is not over, but Amazon this week ended some of the emergency incentives it introduced to encourage its 250,000 warehouse staffers to come into work.

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 gotten 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.Advertisement

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-an-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 unpaid time off to allow them to stay home if they felt unsafe coming to work. This was an extraordinary move for the retail giant, since before the pandemic workers told Business Insider that using more than your allotted amount of unpaid time off (80 hours a 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 more than 105,000 deaths. While the growth rate of the virus appears to have stabilized, experts have warned that smaller outbreaks can still arise across the country.
Advertisement

As of mid-May, eight Amazon workers were confirmed to have died, and more than 100 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 with 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 with Business Insider said the pay cut wouldn't make much of a difference to their livelihoods. The $2 was only a small increase to begin with, they said, amounting to an extra $80 a week for someone working a 40-hour week.Advertisement

Amazon's starting pay for warehouse workers is $15 an hour, meaning since March when the wage hike was introduced that has gone up to $17 an hour.

"The $2 an hour won't have much effect on my life — I find kind of laughable," one New Jersey worker said. "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."

Even those for whom the loss of $80 a week isn't make-or-break say the cut is disheartening.Advertisement

"It just kills me that the company cares nothing about what a pay cut will do to morale," one South Carolina worker said.

The same worker said that if Amazon had shut down warehouses to shield its staff, employees would have been eligible to claim unemployment. The person said this might 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.Advertisement

Inside Amazon's Thornton, Colorado warehouse (picture taken in March 2019).Helen H. Richardson/MediaNews Group/The Denver Post via Getty Images

"Almost everyone is very disappointed and angry," said an Indiana worker whose warehouse now has more than 30 confirmed cases. "We want the pay until the masks go away," the person added.

Amazon brought in a policy requiring employees to wear masks to work in April, though it warned its supplies were "limited."Advertisement

An Amazon spokeswoman said wearing masks was recommended by the Centers for Disease Control and Prevention.

She added that Amazon's $15 starting hourly pay for warehouse workers, introduced in 2018, was better than the retail competition. Target's minimum wage is $13 an hour, though it's due to rise to $15 by the end of 2020.Advertisement

"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.Advertisement

Workers told Business Insider communication could be sporadic.

One California worker described receiving a text on May 18 saying 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," a Tennessee warehouse worker said. "They say they reach out to people they can verify via camera who were close to the infected person."Advertisement

The person added that the policy was "to wait and see who gets infected, report it via text or call, and carry on with business as usual — it's sad."

An Amazon spokeswoman, asked how the firm monitored 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."Advertisement

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 were offering voluntary time off. The way that works is workers get sent a text offering unpaid time off when the warehouse has an ebb in demand.Advertisement

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 that such offers generally ran out within about 15 minutes of going out, with workers especially eager to snap up the time off now that their unlimited unpaid time off 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 worker said their warehouse was still recruiting temporary contract workers on rolling contracts.Advertisement

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.

At the same time, 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.Advertisement

{{}}