Gig economy workers rely on accurate pay estimates to decide which jobs are worth their time and vehicle wear-and-tear. But what happens when a massive corporation allegedly misleads drivers about how much they will actually earn? That question is at the center of a major federal enforcement action that recently concluded with a landmark payout.
Walmart Inc. has agreed to a $100 million judgment to settle allegations brought by the Federal Trade Commission (FTC) and 11 state attorneys general, including Arizona. Regulators claimed that Walmart deceived delivery drivers in its Spark Driver program about the base pay, incentive pay, and customer tips they would receive for completing deliveries. The deceptive practices allegedly caused drivers to lose tens of millions of dollars in expected earnings since at least January 2021.
While the settlement creates a $16.2 million compensation fund for affected workers, it also shines a light on a much larger issue facing gig workers nationwide: whether companies like Walmart are using the independent contractor label to avoid paying fair wages and benefits while still exercising tight control over how the work is done.
The Spark Driver program is Walmart’s internal gig delivery platform. Drivers use an app to accept delivery “offers” that display an estimated payout, including base pay and customer tips. Drivers make their decision to accept or decline based entirely on that information. According to the FTC complaint, Walmart manipulated that information in four specific ways.
First, the company allegedly failed to tell drivers that customer tips were not preauthorized at the time of the offer. If a customer’s payment method declined the tip, the driver simply did not receive it — with no notice. When a single order was split into multiple deliveries, the tip was divided among multiple drivers without any disclosure. Second, when Walmart modified “batched” orders by adding or removing items, it allegedly reduced base pay and tips after drivers had already accepted the offer. In many cases, drivers were only told about the pay cut after they had finished the delivery.
Third, Walmart offered incentive bonuses — such as referral payments for bringing in new drivers — but allegedly hid the conditions required to earn them. A driver might refer a friend and never see the bonus because the new driver was required to work in a specific store zone that was never disclosed upfront. Fourth, and perhaps most troubling, Walmart allegedly told customers that “100% of tips go to the driver” while simultaneously failing to deliver those tips to drivers — and in some cases, not refunding the tip to the customer either.
The settlement breaks down as follows: $10 million goes to the FTC, $11 million is distributed among the 11 participating states, and $16.2 million funds a dedicated driver compensation fund for workers who were underpaid going back to January 1, 2021. The remainder of the judgment is suspended, provided Walmart complies with the agreement’s nonmonetary requirements.
Going forward, Walmart is legally required to implement an earnings verification program to ensure drivers are paid exactly what they are promised when they accept an offer. The company is also prohibited from modifying base pay, tips, or incentive pay after an initial offer is accepted, except in very limited circumstances such as a full customer cancellation.
Eligible drivers are receiving automatic payments through the Spark app as an “Adjustment Credit,” with some drivers receiving approximately $50. For many workers who put thousands of miles on their personal vehicles and paid for their own gas, insurance, and maintenance, that amount may fall far short of their actual losses.
The FTC settlement addresses deceptive pay displays and missing tips, but it does not resolve the fundamental legal question surrounding the Spark Driver program: Are these workers actually independent contractors, or should they be classified as employees?
Under federal and state labor laws, a worker’s classification depends heavily on how much control the company exercises over their work. Separate Walmart class action lawsuits have already been filed arguing that Spark drivers should be treated as employees. These cases point to the fact that Walmart dictates vehicle conditions, sets strict service level requirements, restricts how many orders can be dropped, controls the delivery instructions through the app, and even prohibits drivers from having young children in the vehicle while working.
If courts determine that Spark drivers have been misclassified, the financial implications could be significant. As employees, these drivers would be legally entitled to minimum wage guarantees, overtime pay, and reimbursement for business expenses including fuel, vehicle maintenance, and depreciation. A class action in Washington state raised exactly these claims in 2023, and the case was ultimately resolved through a private settlement in early 2025.
If you have worked as a Spark delivery driver and believe you were paid less than you were promised, there are two separate issues worth examining. The first is whether you are owed money under the FTC settlement’s driver fund. Eligible drivers should be receiving automatic payments through the app, but if you have not received anything and believe you qualify, it is worth verifying your eligibility directly with Walmart.
The second — and potentially more significant — issue is whether you have a separate legal claim for misclassification, unpaid wages, or unreimbursed expenses. The FTC settlement does not prevent individual drivers or class action attorneys from pursuing those claims independently.
If you believe you were affected by Walmart’s pay practices, you may want to review what other workers have recovered through a Walmart lawsuit before deciding on your next step. The attorneys at Phillips Law Group handle consumer protection and class action cases and are available to review your situation. If you drove for Spark and believe you were shortchanged on pay, tips, or incentives, or if you believe you should have been classified as an employee rather than an independent contractor, call us at 1-602-222-2222 for a free consultation. You worked hard for that money — you deserve to know if you are owed more of it.
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