10 ms·

Australian state sets minimum pay for Amazon contractors

112 points by clouddrover 5y ago

lmpdev 5y ago
What's the prospect of Amazon refusing to send packages to NSW now? They've boycotted Australia before I think they've just setup their airline to run out of Brisbane Airport just over the NSW border in QLD (they were hiring a Chief Pilot on our local wanted ads in 2020)
- Handytinge 5y ago
  No worries. I doubt many people would give a rats. A large company closing doors is always a bit sucky, but I don't think Australians have any dependancy on Amazon.
- ByteJockey 5y ago
  I think it's doubtful that they refuse to send packages there. I could see them excluding the area from the normal time guarantee, or from free shipping or something. They send it via the normal postal service or you pay the extra for the higher priced service.
- viraptor 5y ago
  > They've boycotted Australia before That's good. If the choices are paying workers below minimum wage, or not selling in Australia... I hope they just don't sell/deliver in Australia. We're not really losing much that way. Or they could just do what everyone else is doing and use AusPost or curriers - also better than Amazon delivery taking over.
- GlennS 5y ago
  I'd guess that's not on the cards any more. Amazon has been building up in Australia over the last few years. I think most Australians aren't yet aware how much better online shopping is everywhere else, and my bet is Amazon is getting ready to crush the local competition.
  - rightbyte 5y ago
    Amazon is not good online shopping though. It is an uncurated mess of drop-shippers with the low hanging fruit sold by Amazon them self. How is Amazon actually doing in places where they were not first movers?
    - ImaCake 5y ago
      I’ve used amazon in NSW and it’s the only time I’ve had an issue with online shopping. The package was empty! I had no easy recourse because the item was only about $25. Australians are used to using alternatives to Amazon, and I hope they continue to do so. Amazon’s awful treatment of workers has no place in Australia.
    - MomoXenosaga 5y ago
      Bol.com is the Dutch Amazon. They copied Amazon and started twenty years ago. They are even more efficient than Amazon and introduced third party sellers a few years ago. And so far they are quite successful in fighting off Amazon. Just goes to show Amazon is not unbeatable.
    - lozenge 5y ago
      Revealed preferences- Amazon is a very successful online shopping site. Amazon isn't drop shipping. Drop shipping is when the goods are sent straight from the manufacturer to the consumer. Most orders on Amazon are using Amazon Prime/fulfilled by Amazon meaning the goods (whether third party owned or Amazon owned) were stored in Amazon's warehouse before they were shipped to the costumer. Prime 2 day/1 day delivery would be impossible if the goods were dropshipped from Asia.
      - tomnipotent 5y ago
        > Drop shipping is when the goods are sent straight from the manufacturer to the consumer It just means another party besides the seller is fulfilling the order, such as any product on Amazon shipped by the marketplace seller.
- cmroanirgo 5y ago
  Considering their headquarters are in NSW and NSW has 8mil population, with over 64% in the Sydney region [0] which is roughly 1/3 of Australia's total population (25 mil), I think the answer is zero chance. https://www.nsw.gov.au/about-nsw/key-facts-about-nsw#toc-population https://www.nsw.gov.au/about-nsw/key-facts-about-nsw#toc-pop...
- jpz 5y ago
  Zero. They boycotted international shipments due sales tax changes, before they built local fulfilment centres and a local website.
roenxi 5y ago
The "independent contractor" thing has always been a fairly transparent ploy at not calling workers "workers". The ruling sounds fairly logical. This is presumably the primary source [0] from a reliable location. Although not reliable enough to get the title character encoding right. [0] https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nsw/NSWIRComm//2022/1003.html https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nsw/NSWI...
- viraptor 5y ago
  This is not even limited to low-wage workers. A lot of GPs are "contractors" even though they work only for one employer with a provided office and set hours. The tax office has noticed in the last few years and indicated they're not happy.
  - jazoom 5y ago
    Can you please link me to the source for this? I'm a GP and I've always found this a bit strange.
    - viraptor 5y ago
      Sorry, i don't have a link. This info was given to us from mediqfinancial.com.au people (if I remember correctly)
    - jaycar 5y ago
      Might be referring to the ATO withdrawing it's previous advice that GP's didn't fall within the extended definition of employee, for the purposes of the Super Gurantee Act. Good write up of various contractor cases over the last year, here: https://hallandwilcox.com.au/thinking/virdis-and-moffet/ https://hallandwilcox.com.au/thinking/virdis-and-moffet/ "The cases also mark the ATO departure from its long-standing position regarding fee splitting arrangements in the medical field in ATO ID 2011/87, which was withdrawn on 23 August 2021 based on the decision in Moffet. Importantly, ATO ID 2011/87 reflected the ATO’s position for almost 10 years, and has been relied on by many businesses"
  - 5y ago
bpodgursky 5y ago
> Flex drivers with a sedan in New South Wales already earned more, on average, than the enforceable rate that would take effect from March 1, the spokesperson added. Well I mean. Sure, set a minimum. But the labor market was working fine anyway.
- littlecosmic 5y ago
  It's possible that the earning 'on average' is hiding a lot. Now it will be earning 'at least' instead.
AussieWog93 5y ago
More in-depth article on The Guardian here: https://www.theguardian.com/australia-news/2022/feb/18/amazon-flex-drivers-in-nsw-win-minimum-hourly-pay-rate https://www.theguardian.com/australia-news/2022/feb/18/amazo... Most importantly, they only need to pay ~$27/hr immediately. This seems OK at first, as it is above the ~$25/hr minimum wage for casuals (note to non-Aussies: this figure includes a 25% "casual loading" to account for the fact that there is no sick leave, annual leave or guaranteed minimum hours). However, this doesn't consider the fact that the drivers supply their own vehicle as well as out-of-pocket expenses for fuel, maintenance and general depreciation on the vehicle itself. When you take these additional costs into consideration, that initial ~$27 looks closer to an illegally low ~$20/hr. The fact that they were both unpunished for finding loopholes in employment law as well as given a free pass to continue for another 3 years (despite literally being Amazon and therefore having the working capital to pay their drivers properly immediately) looks like it's a win for them.
- emdowling 5y ago
  > The fact that they were both unpunished for finding loopholes in employment law Why should companies or people be punished for finding and using loopholes? By definition, loopholes are perfectly legal. They may be against the spirit of the law, but they are still legal.
  - Retric 5y ago
    Loopholes are legal in theory but not necessarily in practice. They could have just as easily ruled that the use of a private truck requires compensation on top of pay.
    - bennysomething 5y ago
      If you declare loop holes some how illegal you introduce arbitrary judgement.
      - guipsp 5y ago
nomilk 5y ago
Downsides: - Incentivises Amazon to hasten roboticisation and automation - Increases delivery costs, which are passed on to consumers - Consequently consumers buy less, hurting sellers - Disincentivises driver productivity (since they get the same either way) - Removes price signal to underperforming drivers to try another profession, thus misconfiguring the labour market (not in a massive way, but still inefficient)
- mhoad 5y ago
  All for the low low price of exploiting the lowest paid members of the working class and increased inequality. What a terrible trade…
  - nomilk 5y ago
    Australian unemployment is incredibly low at the moment (I could be wrong, but I don't think it's been this low since the 1970's!). See here: https://i.imgur.com/nR8sJTd.png https://i.imgur.com/nR8sJTd.png This means employees can pick and choose who they work for. When some professions pay more than others, that's an important signal to the labour force to consider swapping. It shouldn't be assumed to be meaningless or flippantly legislated away.
    - deleted 5y ago
      [deleted]
    - djrobstep 5y ago
      > When some professions pay more than others, that's an important signal to the labour force to consider swapping. But now they can get paid more without swapping. Honestly, a cynic would think you're just scrambling around for any rationale to justify your ideological hatred of workers getting decent wages.
      - nomilk 5y ago
        Let's be grateful there aren't any cynics in this forum. We should seek to make sense of microeconomics no differently to how Attenborough seeks to understand the natural world. To observe, analyse, explain, and ultimately try to understand what's going on. We can't infer he has a "hatred" of dung beetles because he explains their activities! Price floors introduce distortions which reduce efficiency. It's easy to look at one tiny labour market, like NSW Amazon delivery drivers, and think it's great drivers will make more. Now consider when they go to spend that money. They will have slightly reduced range (some sellers will no longer be profitable and will cease selling), and their pay won't go as far, since they themselves will, like everyone else, be paying more for delivery. Now for the mind blowing part: consider what happens when everyone attempts the same trick of legislating a price floor in the market for their own labour. Now everyone's pay goes up 20% but when they go to spend it, it only goes 60% or 50% as far as it once did when markets were efficient. This doesn't even touch on 2 other major considerations of price floors: 1. If wages are low in one profession, you must ask "compared to what?", and if the answer is another higher-paying profession, then you should consider switching. That is allocative efficiency. It's easy to overlook the gains when thinking of a few hundred workers, but across an entire populace, the gains are enormous. 2. A price floor on labour will put some people entirely out of work, since some people's marginal value will be less than the floor. As a rule of thumb, any NSW driver who doesn't produce A$37.80 of value per hour for Amazon won't have a job after the measure is fully phased in.
deleted 5y ago
[deleted]
worter 5y ago
The reporting on this has been a bit strange. Amazon was not a party to the legal action, but is presumably affected by its ruling.

112 points by clouddrover 5y ago

What's the prospect of Amazon refusing to send packages to NSW now? They've boycotted Australia before I think they've just setup their airline to run out of Brisbane Airport just over the NSW border in QLD (they were hiring a Chief Pilot on our local wanted ads in 2020)

Handytinge 5y ago
No worries. I doubt many people would give a rats. A large company closing doors is always a bit sucky, but I don't think Australians have any dependancy on Amazon.
ByteJockey 5y ago
I think it's doubtful that they refuse to send packages there. I could see them excluding the area from the normal time guarantee, or from free shipping or something. They send it via the normal postal service or you pay the extra for the higher priced service.
viraptor 5y ago
> They've boycotted Australia before That's good. If the choices are paying workers below minimum wage, or not selling in Australia... I hope they just don't sell/deliver in Australia. We're not really losing much that way. Or they could just do what everyone else is doing and use AusPost or curriers - also better than Amazon delivery taking over.
GlennS 5y ago
I'd guess that's not on the cards any more. Amazon has been building up in Australia over the last few years. I think most Australians aren't yet aware how much better online shopping is everywhere else, and my bet is Amazon is getting ready to crush the local competition.
- rightbyte 5y ago
  Amazon is not good online shopping though. It is an uncurated mess of drop-shippers with the low hanging fruit sold by Amazon them self. How is Amazon actually doing in places where they were not first movers?
  - ImaCake 5y ago
    I’ve used amazon in NSW and it’s the only time I’ve had an issue with online shopping. The package was empty! I had no easy recourse because the item was only about $25. Australians are used to using alternatives to Amazon, and I hope they continue to do so. Amazon’s awful treatment of workers has no place in Australia.
  - MomoXenosaga 5y ago
    Bol.com is the Dutch Amazon. They copied Amazon and started twenty years ago. They are even more efficient than Amazon and introduced third party sellers a few years ago. And so far they are quite successful in fighting off Amazon. Just goes to show Amazon is not unbeatable.
  - lozenge 5y ago
    Revealed preferences- Amazon is a very successful online shopping site. Amazon isn't drop shipping. Drop shipping is when the goods are sent straight from the manufacturer to the consumer. Most orders on Amazon are using Amazon Prime/fulfilled by Amazon meaning the goods (whether third party owned or Amazon owned) were stored in Amazon's warehouse before they were shipped to the costumer. Prime 2 day/1 day delivery would be impossible if the goods were dropshipped from Asia.
    - tomnipotent 5y ago
      > Drop shipping is when the goods are sent straight from the manufacturer to the consumer It just means another party besides the seller is fulfilling the order, such as any product on Amazon shipped by the marketplace seller.
cmroanirgo 5y ago
Considering their headquarters are in NSW and NSW has 8mil population, with over 64% in the Sydney region [0] which is roughly 1/3 of Australia's total population (25 mil), I think the answer is zero chance. https://www.nsw.gov.au/about-nsw/key-facts-about-nsw#toc-population https://www.nsw.gov.au/about-nsw/key-facts-about-nsw#toc-pop...
jpz 5y ago
Zero. They boycotted international shipments due sales tax changes, before they built local fulfilment centres and a local website.

roenxi 5y ago

The "independent contractor" thing has always been a fairly transparent ploy at not calling workers "workers". The ruling sounds fairly logical. This is presumably the primary source [0] from a reliable location. Although not reliable enough to get the title character encoding right. [0] https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nsw/NSWIRComm//2022/1003.html https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nsw/NSWI...

viraptor 5y ago
This is not even limited to low-wage workers. A lot of GPs are "contractors" even though they work only for one employer with a provided office and set hours. The tax office has noticed in the last few years and indicated they're not happy.
- jazoom 5y ago
  Can you please link me to the source for this? I'm a GP and I've always found this a bit strange.
  - viraptor 5y ago
    Sorry, i don't have a link. This info was given to us from mediqfinancial.com.au people (if I remember correctly)
  - jaycar 5y ago
    Might be referring to the ATO withdrawing it's previous advice that GP's didn't fall within the extended definition of employee, for the purposes of the Super Gurantee Act. Good write up of various contractor cases over the last year, here: https://hallandwilcox.com.au/thinking/virdis-and-moffet/ https://hallandwilcox.com.au/thinking/virdis-and-moffet/ "The cases also mark the ATO departure from its long-standing position regarding fee splitting arrangements in the medical field in ATO ID 2011/87, which was withdrawn on 23 August 2021 based on the decision in Moffet. Importantly, ATO ID 2011/87 reflected the ATO’s position for almost 10 years, and has been relied on by many businesses"
- 5y ago

bpodgursky 5y ago

> Flex drivers with a sedan in New South Wales already earned more, on average, than the enforceable rate that would take effect from March 1, the spokesperson added. Well I mean. Sure, set a minimum. But the labor market was working fine anyway.

littlecosmic 5y ago
It's possible that the earning 'on average' is hiding a lot. Now it will be earning 'at least' instead.

AussieWog93 5y ago

More in-depth article on The Guardian here: https://www.theguardian.com/australia-news/2022/feb/18/amazon-flex-drivers-in-nsw-win-minimum-hourly-pay-rate https://www.theguardian.com/australia-news/2022/feb/18/amazo... Most importantly, they only need to pay ~$27/hr immediately. This seems OK at first, as it is above the ~$25/hr minimum wage for casuals (note to non-Aussies: this figure includes a 25% "casual loading" to account for the fact that there is no sick leave, annual leave or guaranteed minimum hours). However, this doesn't consider the fact that the drivers supply their own vehicle as well as out-of-pocket expenses for fuel, maintenance and general depreciation on the vehicle itself. When you take these additional costs into consideration, that initial ~$27 looks closer to an illegally low ~$20/hr. The fact that they were both unpunished for finding loopholes in employment law as well as given a free pass to continue for another 3 years (despite literally being Amazon and therefore having the working capital to pay their drivers properly immediately) looks like it's a win for them.

emdowling 5y ago
> The fact that they were both unpunished for finding loopholes in employment law Why should companies or people be punished for finding and using loopholes? By definition, loopholes are perfectly legal. They may be against the spirit of the law, but they are still legal.
- Retric 5y ago
  Loopholes are legal in theory but not necessarily in practice. They could have just as easily ruled that the use of a private truck requires compensation on top of pay.
  - bennysomething 5y ago
    If you declare loop holes some how illegal you introduce arbitrary judgement.
    - guipsp 5y ago

nomilk 5y ago

Downsides: - Incentivises Amazon to hasten roboticisation and automation - Increases delivery costs, which are passed on to consumers - Consequently consumers buy less, hurting sellers - Disincentivises driver productivity (since they get the same either way) - Removes price signal to underperforming drivers to try another profession, thus misconfiguring the labour market (not in a massive way, but still inefficient)

mhoad 5y ago
All for the low low price of exploiting the lowest paid members of the working class and increased inequality. What a terrible trade…
- nomilk 5y ago
  Australian unemployment is incredibly low at the moment (I could be wrong, but I don't think it's been this low since the 1970's!). See here: https://i.imgur.com/nR8sJTd.png https://i.imgur.com/nR8sJTd.png This means employees can pick and choose who they work for. When some professions pay more than others, that's an important signal to the labour force to consider swapping. It shouldn't be assumed to be meaningless or flippantly legislated away.
  - deleted 5y ago
    [deleted]
  - djrobstep 5y ago
    > When some professions pay more than others, that's an important signal to the labour force to consider swapping. But now they can get paid more without swapping. Honestly, a cynic would think you're just scrambling around for any rationale to justify your ideological hatred of workers getting decent wages.
    - nomilk 5y ago
      Let's be grateful there aren't any cynics in this forum. We should seek to make sense of microeconomics no differently to how Attenborough seeks to understand the natural world. To observe, analyse, explain, and ultimately try to understand what's going on. We can't infer he has a "hatred" of dung beetles because he explains their activities! Price floors introduce distortions which reduce efficiency. It's easy to look at one tiny labour market, like NSW Amazon delivery drivers, and think it's great drivers will make more. Now consider when they go to spend that money. They will have slightly reduced range (some sellers will no longer be profitable and will cease selling), and their pay won't go as far, since they themselves will, like everyone else, be paying more for delivery. Now for the mind blowing part: consider what happens when everyone attempts the same trick of legislating a price floor in the market for their own labour. Now everyone's pay goes up 20% but when they go to spend it, it only goes 60% or 50% as far as it once did when markets were efficient. This doesn't even touch on 2 other major considerations of price floors: 1. If wages are low in one profession, you must ask "compared to what?", and if the answer is another higher-paying profession, then you should consider switching. That is allocative efficiency. It's easy to overlook the gains when thinking of a few hundred workers, but across an entire populace, the gains are enormous. 2. A price floor on labour will put some people entirely out of work, since some people's marginal value will be less than the floor. As a rule of thumb, any NSW driver who doesn't produce A$37.80 of value per hour for Amazon won't have a job after the measure is fully phased in.

deleted 5y ago

[deleted]

worter 5y ago

The reporting on this has been a bit strange. Amazon was not a party to the legal action, but is presumably affected by its ruling.