Amazon fined $5.9M for breaking labor law in California
washingtonpost.comRetail has had labor quotas (with serious health/mental consequences) since time immemorial, but i don't see any outrage against Sears, ToysRus, or BedBath.
Why ?
The action is under the:
"Warehouse Quota Law, which went into effect in 2022 and limits quotas for 'work that must be performed at a specified speed or the worker suffers discipline,' "
So it's not just that Amazon was cracking the whip really hard, Amazon was particularly astray of a particular (and somewhat new) law.
Separately though, Amazon evidently mistreats employees excessively relative to the retailers you mention, e.g. delivery workers would have to pee in bottles: https://www.forbes.com/sites/katherinehamilton/2023/05/24/de...
Did they have secret quotas that were not revealed to their employees? That's why.
Yes, usually they do.
I suspect there is a more political motivation to target Amazon specifically.
some where not so secret, which is why i knew about them, and the complete mental health anguish they caused - tripping over a customer was not as illiteral as you'd expect.
Probably because it's the largest employer of warehouse workers in the nation and the second largest employer overall? Also, the issue is not having quotas, it's having quotas and keeping them secret from the workers.
Two of those are dead and the third has coded several times over the last ten years. Amazon, on the other hand, is one of the world's biggest businesses.
The Triangle Shirtwaist Factory doesn’t see much outrage on this forum either, because it also doesn’t exist anymore. https://en.m.wikipedia.org/wiki/Triangle_Shirtwaist_Factory_...
It’s really, really, really difficult to interpret your comment in good faith, can you expand on your question? Otherwise you just come across as trying to poison sentiment analysis algorithms.
I was just making a point that those other companies did exactly what amazon did, but for reasons unknown, never became targets.
I'm curious what has changed. The regulators? The sentiment. The companies I quoted are now bankrupt. But some time ago they were not. I could have said Macys, or add a few more contemporary names, but pcked them to illustrate my larger point: if amazon wasn't as profitable, it would not be a target either.
Everyone wants to bring the one at the top. I understand that sentiment, but its not healthy when its ad-hoc
I read your commment and I feel like it is indistinguishable from a talking head on TV using a “whataboutism” to defend the actions of Amazon without seeming to defend the actions of Amazon. Which makes me feel mad if that’s your goal and somewhat curious if you knew that before you posted.
I would like to believe you’re an extremely passionate labor rights advocates and that you can hold all corporations to account. If that’s the case could you keep the original text and add an “Edit: my bad. We shouldn’t downplay their harms, but I’m passionate about this, where are more of these conversations happening?”
You do realize that all 3 of the companies you listed are all bankrupt, yeah?
And more entertainingly, bankrupt specifically because of Amazon
Mayhaps to you the practice is just normalized, whereas others don't see it the same way?
Because those companies are all bankrupt, insolvent, and liquidated?
I would be devastated if I was fined 6 cents after robbing an entire store
The issue here is that Amazon had productivity quotas for its workers that were kept secret from the workers. It's the keeping a secret part that is illegal. On the one hand, this seems reasonable, but the fact that the law only applies to warehouse workers (the "Warehouse Quota Law") and was passed in 2022 makes me suspicious that this isn't a good faith worker protection law but rather specifically targeted at Amazon for political reasons. If this practice is so bad, why is it allowed for all other industries?
> makes me suspicious that this isn't a good faith worker protection law but rather specifically targeted at Amazon
It seems to target Amazon, but for good reasons [1].
The law’s principal mode of enforcement is private [2]. This fine appears to be more the state laying a trail of breadcrumbs for private attorneys to follow than the last word on the matter.
> why is it allowed for all other industries?
Defining what constitutes a quota is hard. If there isn’t evidence of abuse in other settings, it doesn’t make sense to expand the regulatory burden for the hell of it.
[1] https://www.schneiderwallace.com/media/california-new-york-a...
[2] https://www.californiaemploymentlawreport.com/2021/09/califo...
They have a good reason for targeting the practice. They do not have a good reason for targeting Amazon in particular.
And I suspect the good reason you mean is this:
> Quotas must also be limited to not prevent workers from taking rest breaks, meal breaks, bathrooms breaks, or prevent compliance with health and safety standards.
Amazon is not being accused of doing this here. They are being fined for keeping the quota secret, not for the quota itself.
> do not have a good reason for targeting Amazon in particular
The law applies to all warehouses.
Are secret quotas common in other settings? I don't think I've ever been told about one, and I had a whole lot of other jobs before starting this career.
Common or not, if the practice is bad why make the law specific to warehouse workers instead of making it a general law that applies to everyone?
I think it's a "damned if you do, damned if you don't" thing. If you make the law sweeping, businesses will complain it's an infringement of big government. If you make the law targeted, businesses will complain they're being unfairly selective.
What other industries do you think would benefit from this? Warehouse work might be unique enough to be afforded unique protections. There a lot of dark patterns you can employ against your workers in those settings, creating orders that are hard to fulfill on time, arranging your warehouse in ways that reduce worker productivity or even safety. Since many warehouses are moving consumer items and often food items there does seem to be reason to consider them separately from other industries.
They also have a separate labor union in many regions.
Linking my answer to another comment asking the same question: https://news.ycombinator.com/reply?id=40724535
Well you wouldn't have been told about the secret quota, would you? But let's say you're right that it isn't common outside of warehouses. Even in that case, why would you write a law only for warehouses?
Let's say that there was a problem where cattle ranches were giving out beatings for underperforming workers. Would you fix this by writing a law that says "it is illegal for cattle ranches to beat employees" or would you just outlaw all beatings of all employees so that you won't have to revisit this when another industry decides to do it?
I'm not actually arguing that they existed for you, but if they did I wouldn't expect you to be told about secret quotas.
I really doubt there was a strict quota, more likely some kind of stack ranking.
> If this practice is so bad, why is it allowed for all other industries?
Competent lawmakers consider enforceability. Enforcing a law like this requires either the creation and funding of an enforcement agency, or additional funding to an existing agency to enforce it. If your law applies to all industries, that funding is massive and gets struck down--either the law simply isn't passed, or the law is passed but is a totally ineffective political gesture. There are rare exceptions, where there's political will to actually put together that funding (for example: ObamaCare), but then you run into the complexity of how such a law interplays with the various industries and parties impacted, and getting the enforcement of such a law right takes decades of tweaking and handling edge cases, which may never actually work.
Long story short, I'd much rather see small laws that target small, well-understood problems and fix them, than see unenforceable feel-good political gestures or some politician's magnum opus for his legacy that tries to do something too complicated for anyone to understand.
That's nonsense. You don't need any additional bureaucracy. That's just an excuse that bureaucrats use to justify their worthless existence. Do we need new courts and judges every time something new is made illegal?
> Do we need new courts and judges every time something new is made illegal?
That's not what I was talking about.
If you make a law saying that quotas have to be communicated to employees so they can know what they're working up to, then you need someone to physically go to the workplaces and make sure that quotas are being communicated. It's as simple as that.
If you are enforcing this in, say, 500 warehouses, one person can probably do all the inspections, as that's a little less than two locations per day to go to all the locations in a year.
If you're enforcing this in every workplace in a state the size of California, the inspection apparatus necessary becomes unwieldy, and likely doesn't happen, making the law unenforced and ineffective.
As an aside, while this isn't what I was talking about, creating new laws does in fact mean you need more courts and judges. I'm not sure how you think this could not be the case--do you think you can just add more cases and the same number of workers will simply work more to absorb the additional workload? Keep in mind that most courts in the US have massive case backlogs, and create incentives to settle out of court to avoid court time, which results in all sorts of problems such as dangerous criminals getting away with slaps on the wrist on the one hand, and non-violent offenders being pressured into dangerous CI situations to avoid jail time on the other hand.
Or you could be smart and do no inspections at all and say whoever reports it gets 20% of the fine.
Sure, and then hire someone to handle all the reports from people who don't understand the rule, while real reports are inhibited by warehouse owner propaganda such as "your reports won't be confidential" or "a 20% cut of this fine won't cover your lost career" and the more basic fact that almost nobody will know your law exists unless you launch a publicity campaign.
Fiddling economic knobs to try to indirectly get the invisible hand to do what you can do is a terrible enforcement strategy.
Two other companies were hit with fines before Amazon. Amazon may have innovative ways of abusing workers but they don't have a monopoly.
Did you even read the article?
Amazon is the third company in California to be hit with fines under this law, joining Sysco and Dollar General, which were fined $318,000 and $1.3 million in October and November, respectively, according to copies of the citations shared with The Post.
1. Proportionality. Fines should be proportional to the company's size, revenue, and the severity of the violation. The financial impact should be significant enough to grab the company's attention and incentivize change.
2. Escalating penalties. Implement a system of escalating penalties for repeated violations w/increased monitoring.
3. Transparency. Publicly disclose the details of labor violations and the fines imposed.
4. Targeted sanctions. Temporary suspension of licenses, government contracts, at local, state & federal level.
5. Victim comp. Ensure that a portion of fines go towards comping the affected workers.
> Proportionality. Fines should be proportional to the company's size, revenue, and the severity of the violation. The financial impact should be significant enough to grab the company's attention and incentivize change.
This is a fine for a local violation. Trying to make it proportional to the entire company's size (which expands far beyond those locations and even business types) would be insane.
The fines are calculated in proportion to the estimated damage and potential profits.
> Escalating penalties. Implement a system of escalating penalties for repeated violations w/increased monitoring.
Fines for repeat violations would be higher, so no need to be upset.
> Transparency. Publicly disclose the details of labor violations and the fines imposed.
Literally in the article. Did anyone read the article? Why are we upset about things that are already explained in the article?
> Targeted sanctions. Temporary suspension of licenses, government contracts, at local, state & federal level.
You want to suspend the Amazon warehouse's license for their first violation for not properly disclosing quotas in writing?
Do you have any idea what happens when you do this? The people employed there are laid off. They lose their jobs. Why would anyone assume that you can just shut down companies and the only people who suffer are some abstract group of executives somewhere?
I've provided a summary of proposals, not a comprehensive regulatory framework. Please reread the rules: https://news.ycombinator.com/newsguidelines.html
These a 5 very reasonable proposals.
One I always advocate for regarding smaller businesses that do this. Legally you must to list your previous business names for 5 years. So "Super happy Mega Global tech - Formerly Bastards Inc." That way you cannot just name change away your reputational problems.
Can Amazon even count that low?
Is this more or less than they made from breaking said law.
I know regulatory capture is a thing but it seems like there should be some minimum “Crimes committed for financial gain that are punished with a fine must have a minimum fine of 100x the amount of money they made from the crime”
The 90’s saw a constant stream of journalists and politicians praising 3 strikes laws. Where’s our “100x FAFO laws”?
> Where’s our “100x FAFO laws”?
Prohibited by 8th Amendment's ban on excessive fines.
1. where's the case law that makes it apply to corporations?
2. how is 100x the crime excessive, but $150,000 per pirated song isn't? That's a lot more than 100x the cost of a song.
The $150K/song isn't a government fine, but rather statutory damages awarded to the plaintiff (the copyright holder), so it isn't limited by the prohibition on Excessive Fines.
It was also never awarded - it's a made-up number.
https://en.m.wikipedia.org/wiki/Eighth_Amendment_to_the_Unit...
Waters-Pierce Oil Co. v. Texas, 212 U.S. 86 (1909)
> Where a state antitrust law fixed penalties at $5,000 a day, and, after the verdict is guilty for over 300 days, a defendant corporation was fined over $1,600,000, this Court will not hold that the fine is so excessive as to amount to a deprivation of property without due process of law where it appears that the business was extensive and profitable during the period of violation and that the corporation has over $40,000,000 of assets and has declared dividends amounting to several hundred percent
Seems like it would be acceptable to fine Amazon 100x more then
99x then and call it a day.
(J/k)
If we (America) can find a way to send someone who shoplifted three golf clubs to prison for 25 years to life and have it not be “cruel and unusual punishments” we are certainly clever enough to find a way to charge companies who view fines as “the cost of doing business” enough so they will at least thing twice about it and have it not be “excessive”.
Jail time is the answer (instead of fines only).
In case anyone doesn’t want to look up said amendment, here is its text in full:
“Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.“
A fine is meant to discourage a behavior. A fine isn't excessive unless (and until) it -effectively- discourages the wrongful behavior.
Or at least that’s what my argument would be in court.
These fines DO discourage these behaviors. As some who handled fines at a very large bank, a fine would ALWAYS change the bank's procedures. ...and not only fines against us, but fines against ANY bank would alter procedures.
Test your theory in your new profession as lawyer, or judge if that's your prerogative, sometime soon in court.
Personally, if I was in power I would disbar you immediately and pray that you never offer legal advice again.
Can you please not cross into personal attack or post in the flamewar style? We're trying for something different here.
No wonder half the comments in your comment history are downvoted!
Instead of attacking me, why don't you share some sources that prove my thinking wrong?
Please don't respond to a bad comment with an attack of your own. Your reply would have been fine with just the second sentence, and better still with just the second clause of the second sentence.
It's also fine to simply not react. From https://news.ycombinator.com/newsguidelines.html: "Don't feed egregious comments by replying; flag them instead." a.k.a. please don't feed the trolls
What's excessive here?
Fines have to serve as a deterrent to be a useful punishment, and if corporations aren't being deterred then clearly the fines aren't high enough yet.
That’s not a compelling argument. You have to justify that.
Is there a term similar to “regulatory capture” but where the government becomes dependent on fines?
I suppose that if workers lost out on benefits of approximately the fine amount, the fine becomes a regressive tax since it goes towards general revenue rather than to whom was harmed.
I think you’re being downvoted because the premise of your question would imply that trickle down economics works, it does not.
But I can think of one case where fines create a perverse incentive: really small towns run speed traps that fund their law enforcement. I think most cops have a non trivial amount of their budget based on fines. It’s debatable if this is bad. I feel like it’s morally wrong to set a speed limit to something no one follows so anyone can be cited for breaking the law at any time, but at least (most) judges seem to acknowledge that something like “1 mph over” is a BS ticket.
I’ve seen some knee jerk problems from other regulatory attempts like having healthcare required for full time workers so companies cut everyone’s hours to 39 a week. But to me this isn’t a sign that the regulations are the problem. To me it speaks to how companies will do anything they can that they can get away with and it’s a sign that the regulatory bodies need to be better able to adapt and respond to malicious compliance.
I feel like the CFPB is a bright spot.
> because the premise of your question would imply that trickle down economics work
I’m not certain how a person could read that from my text. The premise is:
Effectively the value from the harm the employee suffered is transferred to general government activities. The employees are not made whole from being mistreated but their mistreatment is a revenue source for the government. It would be interesting to see the actuals but my cynical guess is that the money will go toward lawyers and other people better off than warehouse workers, which is why I call it regressive.1. Employer does some harm to employees 2. State fines employer the value of employee harm 3. State general fund receives money (minus lawyering costs) 4. Employees receive no remuneration for harm 5. General fund pays for general government activitiesI read your original comment as the company would make less money after being fined therefore take it out of their employees paychecks. Thanks for the clarification that's not what you were talking about.
Regarding the premise: The purpose of the fine is to provide a disincentive to it happening in the first place (in theory). I tend to like restorative justice though.
> The purpose of the fine is to provide a disincentive
Given the root comment's premise that the fine is "more or less than [Amazon] made from breaking said law," that the fine goes to the state rather than the harmed workforce members does not provide a disincentive nor does it right a wrong. For Amazon it is net neutral and the state gets what warehouse workers would have had. The state is the entity taking from people's paychecks in the name of "justice."
> Given the root comment's premise
This is my comment you're responding to at the root
> [Me:] Where’s our “100x FAFO laws”?
I wrote that comment. My point was that the fines should be larger to discourage bad behavior.
You're saying that you're wanting things I want (disincentives for companies to harm, restorative justice), but you're showing opposition to my attempt to deliver those things. Or at least you've not shown support.
If that's not the case maybe something like "I 100% agree we should raise the fines until they provide a disincentive. Yes, and [...]" or if you disagree "I like where you're headed, but I disagree on how to get there. I suggest we [...] which will [...]. This is in comparison to your suggestion which will [...]" would really help me clarify your position.
> The state is the entity taking from people's paychecks in the name of "justice."
This reads as someone who would want to get rid of the fines all together (a liberatrian anti-taxation anti-regulation take). Which is the same vibe I got from your first comment. Both seem at odds to your other stated goals (restorative justice). I feel either I'm being gaslit or there's more you're not saying.
I would like you to be more explicit. Could you take one of the templates I tried earlier and see which fits what you're trying to convey and respond with that? If neither template fits, state why.
Your comments read like a totalitarian who wants a world by and for the government, not by and for the people. You are gaslighting yourself if you don't realize this. Listen to your first thought which was "more fine" not "more right."There is no need for templates. I will not color by numbers. Writing does not attempt to deliver anything. The purpose of a system is what it does. Taking from a taker is not justice.
> I think most cops have a non trivial amount of their budget based on fines.
I think I've seen instances where automated traffic camera fines just go into a city's street/road safety improvement fund, which seems like a good way of handling things.
Once a fine becomes a revenue stream there will be an incentive to maintain the flow of money that may run counter to the goal of the fine.
People don't want to hear this.
It’s ~ six minutes of revenue.
That's total global revenue I assume? Not the gain they had from breaking this law.
~ 2 hours of profits @ 5%
This is literally an arbitrage they've done the math on.
There should be personal criminal liability and jail time for officers.
They’ve been doing this for years. It costs less to pay the fines than the loss in productivity would be, the robots didn’t pan out in the timeframe advertised and driving human labor to subsistence level (“loose labor markets”) is both policy and incidentally the reason why all the polls say “the economy is terrible” and all the pundits say “how do we convince the public that the metrics show they should be happy”.
The pundits say the economy is fine, and that the labor market is still really tight (but slackening gradually). They do note that economic sentiment is really, really bad, and it seems to be for non-economic reasons (residual inflation shock, mostly). Avoiding further inflation is the key reason that policy is leaning on the labor market at all.
There is a general consensus that real wages after accounting for the realities around things like health care have been flat or declined for coming up on 45 years.
It’s a quiet consensus, but few are claiming that Gen Z is just crushing it on home ownership or any other credible proxy for doing as well as the baby boomers.
Cheap consumer electronics are not substantially wealth! High-fructose corn syrup might be cheaper than ever, but anything north of that is rapidly becoming a boutique luxury. A public university education is triple what it was 20 years ago.
Hacker News is in many ways the best thing on the Internet, but people trying to finely parse this and that nitpick under a headline “Amazon Pays The Fines So They Can Continue to Exploit Workers with Impunity” makes me embarrassed to hang out here.
How do you 'drive human labour to subsistence level'? Surely not by widening their job options?
Maybe I'm not following, but I'm seeing tons of responses saying that a low fine is alright because this is a local violation. What is the reasoning there? Doesn't the profit go to the corporation as a whole?
The penalty must be proportionate to the crime. Otherwise, there's a good chance a higher court will overturn it.
It doesn't matter where the profits go; in this case, management at two warehouses did something wrong, and the fine reflects the scope of the harm done.
If this could be proven to be happening illegally at every warehouse nationwide, then it becomes a larger issue and there will be larger personalities.
It seems to me that it matters where the profit goes because part of "proportionate to the crime" means that the fine is sufficient to discourage the behavior.
Everybody saying slap-on-the-wrist.
But does the next time fine consider priors?
I doubt. The USA needs to inflict more pain like “1% of global revenue per infraction” and things would change quickly.
Why taxes are proportional to income but fines aren't?
Because taxes and fines are two different things. Taxes aren't a punishment for a crime. Fines are proportional to a crime. Two of Amazon's 300+ warehouses were found to be breaking a labor law
The fine should be a permanent percentage salary increase.
Because you create a loophole where non-profitable companies commit the offense and get cash back (if fines were connected to revenue, negative revenue would become a reward)
If fines were tied to revenue, then non-profit wouldn't stop the fine. If you had $1200 in revenue, and $1000 in expenses, the fine could be calculated against rhe $1200, which is exactly what non-companies have to do.
And it would make sense to be revenue-based, as opposed to profit-based.
Obviously you would have a floor, just like taxes do.
Yep, plenty of fines work this way. It's how GDPR works: percent of turnover (revenue) or a floor, whichever is higher [1].
And worst case scenario define revenue in the fine's terms in a way that it disallows accounting tricks.
That the max fine for GDPR, not the min.
GDPR is really a "fine whatever they want" regime, starting small and increasing for non compliance.
> up to 20,000,000 EUR, or in the case of an undertaking [economic entity], up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher
I think the "whichever is higher" wording does make it a floor but you're right that the "up to" makes it whatever they want. So I guess it's a meaningless variable floor.
It still works out similarly: they could fine a company like Amazon, with a lot of revenue, up to around 21 billion (regardless of profit) while they could only fine a small company up to 20 million.
we're talking about it being tied to __gross__ revenue, not net revenue (profit)
You can’t have negative revenue or if there is some obscure definition, just handle that edge case
$5.9M is not even a rounding error for a $2T corporation.
The crime was also not even a rounding error.
The important thing is whether the punishment fits the crime.
In terms of profits gained, perhaps. It might have catastrophic consequences for workers who suffered accidents directly or indirectly (eg crashing a car while driving home from an exhausting shift).
The law, wisely, usually doesn’t do the butterfly effect thing. That way lies madness.
If the criminal doesn’t even feel it, then it doesn’t fit the crime. $5.9 million is nothing for Amazon to pay in order to avoid unionization
How much of that corporation is California?
You mean the 4th largest economy in the world? I'd imagine it is quite significant.
"If California were a sovereign nation (2024), it would rank in terms of nominal GDP as the world's fifth largest economy" (wikipedia)
Still surprising.
Because Google, Meta, etc are based on CA doesn't mean that Amazon does a promotional amount of business or employment there.
The company “failed to provide written notice of quotas” to employees, as required. Tape a sheet of paper on the wall with the numbers, done. Meanwhile, the antipathy of jealousy is palpable.
If you taped a paper on the wall to notify employees of each disclosure required, you'd probably run out of viable wall space before you ran out of notices.
Amazon makes that money in mere minutes. This is not even a slap on the wrist.
5.9 mil?? that's like fining a working class citizen 5 cents LMAO
interesting that this is published on Jeff Bezos' newspaper.
humiliation ritual
this is an insult to all working force
Amazon made $64,809,782.60 in revenue every hour in Q3 2023.
Source: https://www.junglescout.com/blog/how-much-does-amazon-make-i...
How much of that was from Californian warehouses? Because if you don’t do that math, the fine gets overturned by the courts.
That not only reduces the deterrence factor. It delays private enforcement by the harmed employees who would have otherwise relied on the commission’s facts in court without the colour of them being overturned on appeal.
The fine doesn't even amount to a slap on the wrist.
It's like if someone stole $1000 worth of merchandise from a store and the only punishment is a $1000 fine... and you get to keep what you stole.
Why be law abiding when you could break the law and potentially make more money? You'd have to be stupid to be law abiding in a system like that.
> It's like if someone stole $1000 worth of merchandise from a store and the only punishment is a $1000 fine... and you get to keep what you stole.
No, it's not like that at all. The fine was for two specific locations and it was for not disclosing specific quotas in writing. Drawing analogies to a person stealing from a store doesn't make sense.
The fine was likely calculated to offset any potential gains they may have made by failing to disclose quotas, whatever that may be. So again, your analogy about getting to keep what you stole doesn't make sense.
Basically none of these analogies or proportionality arguments in this thread make sense at all. I suspect half of the reason is that nobody read past the headline far enough to realize that it was for two specific locations, not for Amazon the entire giant business. The people trying to use Amazon's total earnings across all business units across all locations as part of their argument are extremely misleading.
"The fine was likely calculated to offset any potential gains they may have made by failing to disclose quotas" sounds an awful lot like what I got out of the analogy made by GP. I.e. it wasn't about saying it was literal theft of goods but that the risk is no greater than the reward and so the worst case return on breaking the rule is you're back to where you would have been had it been followed.
Similarly people referencing Amazon's total earnings aren't necessarily trying to be misleading about how many locations this occurred at or ignorant of more than just the article's headline (some are though, this is always true in a large discussion). Typically said people are just frustrated with all the above and would like to see much higher fines in this kind of scenario so the overall business cares more.
I'm not saying you should necessarily agree with those stances or conclusions, I don't completely myself, but it should take a bit more than what you wrote to brush everyone off wholesale like that.
Well, if you have an unethical profitable company-wide policy that's illegal in many jurisdictions that is punished by merely trying to offset your gains from what's provable, and you're unlikely to be prosecuted everywhere it's illegal, it's still a huge net gain for a company to break the law. The idea behind fines being large enough to make a company really hurt is they're discouraging some MBA sitting down and figuring out that violating [labor/environmental/financial/etc] regulations designed to protect the public's interests are actually more profitable than the punishment, so the appropriate business decision is to ignore the law.
On a more general note, fines need to be something like 5-10x of the benefit, not 1-2x. Of course the gov has limited resources, limited ability to win trials, etc, so they need to be far beyond just compensation.
> fines need to be something like 5-10x of the benefit, not 1-2x
There is zero chance Amazon was saving more than $1mm at these two warehouses from hiding quotas since the law went into effect. We’re already at 5x+ (most likely 10x+) benefit before considering damages.
My back-of-the-napkin math: Amazon warehouses run 24/7, so a million divided by 365 is $2740 per day, which turns out to about $114 per hour. Amazon warehouses employ about 1500 people (even though SoCal warehouses probably employ more.)
I would be absolutely gobsmacked if they saved that little.
I'd be interested to see what labor costs are at these facilities. I could easily buy that, if they rightfully disclosed the quotas they put people under, they would need to pay significantly more in order to attract and retain workers. Maybe 10% - 20% more, including taxes and benefits?
Is this why Europe fines American companies based only on their global income? Like, hey you violated this privacy thing in the EU, and you made a lot of money outside of the EU, so give us a few billion.
Surely the fines will become exponentially bigger every time they are caught doing the same, right?
They’ll learn to cover their tracks better
Yep, every time someone is defeated they can learn one of two lessons. How not to do it again OR how to not get caught again.
We will keep the secret quotas secret from hereforth.
Not... double secret quotas!
From the politicians they funded?
LOL, doubt it
It’s actually more like:
You stole $1000 and if you are caught, your fine is $10.
No it is more like:
You stole $1000 from me and now you have to pay $10 to someone else.
Not really.
If their revenue was $100M from breaking the law, but the margins were only 1%, then they profited $1M.
So a $5.9M fine would have been almost 6x the benefit.
Not the best analogy... In San Francisco if you steal $950 worth of merchandise from a store, there is no fine or punishment, and you get to keep what you stole.It's like if someone stole $1000 worth of merchandise from a store and the only punishment is a $1000 fine... and you get to keep what you stole.Would you say that’s a good thing or a bad thing? If you think it is a bad thing, then it seems like a fitting analogy, right?
If GP's point is about the justice system in general, then yes. If GP's point is about this fine in particular, or about how big corporations are treated in general, then it's a poor analogy.
They will also wast 5mm+ in taxpayer dollars via appeals. The Corporate Cartel will always win.
This is fair, but remember the business units are partitioned and extremely hierarchical in a company this size, so someone, somewhere, well below the top, got in trouble for this.
This fine was for two Amazon warehouses near LA. Amazon reportedly has over a thousand fulfilment centers in the US [1].
[1] https://www.digitalcommerce360.com/article/amazon-warehouses...
That seems pretty low... is what I said before I saw the metric being mneasured in hours instead of months.
This is tough because we had fine ceilings for a good reason. But maybe we should start considering proportional charges (+ maybe a fine floor) at this rate.
A. Amazon's retail margin is nearly zero.
B. California is <0.5% of world population; IDK how much of Amazon's worldwide revenue.
I see this parroted around a lot, but Amazon's retail margin is not nearly zero. It's 3-5%, and accounts for over half the profit the company makes. And that's even before you account for the "profit" AWS makes from retail's purchases
3-5% is a heck of a lot closer to 0 than 100%.
Quoting top-line is misleading.
I encourage you to provide examples where a business has 100% profit margin
It's not a good idea to ask how much money a retailer has by looking at their revenue.
It looks like their net income last year was about 30 billion.
https://www.statista.com/statistics/266288/annual-et-income-...
California collected $26M in taxes every hour in 2023.
Neither of the parties here lack monetary resources.
Those tax dollars go back to California and country. Amazon does everything in its power to not pay taxes or help society. It really shows little Amazon is taxed at, if at all.
Amazon employs 1.1 million people in the US.
To me, that alone is definitely helping society.
What do you think happens to the revenue Amazon collects?
> not help society
Only if you ignore consumer surplus?
"If the penalty for a crime is a fine, that law only exists for the lower classes"
Wow, that won't teach them.
man, this is going to set them back at least 15 seconds.
Oh wow $5.9M
Where are going to get their peanuts from now?
That's, what? Half an hour of operation to them?
In Finland, speeding fines are based on your income. Can we have that, but for corporations?
I like the idea. If you're a startup that's losing money, you can get paid by the government to commit crime?
Maybe proportional to revenue (not profit).
Plus standard baseline?
Revenue, while it would solve the fact that profit-taking vs reinvestment is arbitrary there are other flaws. For one that would make it disproportionately ruinous on low margin businesses. If the fix was so simple I suspect that we would see it tried in more places.
I don't think it's just simplicity. It's probably also contrary to the interests of some of the law-makers' biggest donors.
It's really frustrating to see this disingenuous comment repeated whenever this conversation comes up.
This happens to some extent via punitive damages, which are designed to be large enough to get the attention of the offender. I don't think it happens outside of punitive damages though.
Countries should take stock equity over fines. It dilutes the owners share value and punishes stockholders who don't make a company's' boards accountable. With ownership, the government also then has the ability to 'peer behind the veil' more easily and make sure management is behaving. Finally, if a company continues to misbehave the government over time takes ownership and can then replace the board (think a corporate equiv to a death penalty, since under the law corporations are treated as people).
> With ownership, the government also then has the ability to 'peer behind the veil' more easily and make sure management is behaving
You want every politician you don’t like in the country having this power?
> if a company continues to misbehave the government over time takes ownership and can then replace the board
This is expropriation. (It’s also fines with extra steps and ongoing costs.)
> think a corporate equiv to a death penalty
Corporate death penalties are fines with extra steps. They’re a red herring to avoid what companies actually fear, massive fines that force them into liquidation. Anything you want with a corporate death penalty, massive fines achieve more cleanly. The only function bringing the former up has is to distract from the latter.
Is that really true? CDP stops the operation. Massive fines would allow the company to continue operating sold off. The fines may be financially worse for the owner but in terms of the unlawful and antisocial behavior the death penalty would more directly end the conduct by ending their operation.
In many cases this would be preferable I think: the owners may well have been unaware of the bad conduct and at least individually unable to prevent it. In that case, ending operations and unwinding the company and returning whatever wealth can be recovered to the owners may be a more fair thing to do.
> CDP stops the operation
What do you do with the assets? If you’re reorganizing them, this is no different from putting e.g. the automakers through bankruptcy. If you’re taking them over, it’s no different from a bail-out. If you’re liquidating them, why are you liquidating them? Just fine them and let them sort out the selling of assets.
> ending operations and unwinding the company and returning whatever wealth can be recovered to the owners
They’d just reconstitute the company. Presumably they weren’t seeking liquidation beforehand, and see the combined assets worth more than them individually.
Corporate death penalty is a distracting term from massive fines (and license revocations). Fines are a possibility. Corporate death penalties are needlessly, some might say intentionally, over complicated in a way that makes them far favourable to massive fines or revocations.
> You want every politician you don’t like in the country having this power?
What an interesting question. I personally feel like this line of thinking is a microcosm of how terrible the US frame of mind is right now.
Mostly though, you like some of them??
It’s the only question worth asking, ever, about law: when the law is inevitably misused, how bad is the outcome?
> you like some of them?
Yes, the ones who understand why betting on benevolent dictators is a losing strategy in the long run.
If it reduces corporate power enough we might actually be able to get some trustworthy people into office.
Reducing the power of any potential rivals is supposed to make a position more attractive to the trustworthy? That sounds rather backwards.
Can you articulate an equilibrium of political economy that reflects your redesign? Like what’s the role of politics in economics?
> reduces corporate power enough we might actually be able to get some trustworthy people into office
If what did? The history of expropriation is one way: the rulers and their families accumulate the jewels. OpenAI gets fined and given to Biden, Meta gets fined and given to Trump. The economy gets divided by the people who have the power to seize.
This is pretty naive about the reality of stock ownership. If you're an investor in the US, you probably own the S&P 500. You want me to hold 500 different companies accountable? And, failing that, you're going to dilute my shares?
The reality is that shares are absolutely useless as a distribution of responsibility. Shareholder decisions are dominated by a few majority shareholders who likely hold shares as part of a portfolio, and in the context of a portfolio, it's the whole thing that matters, so it may even be good to tank the share price of one company if it benefits the value of other holdings. Minority shareholders are held responsible for majority decisions they may have directly opposed. And shareholders are limited in what they can do to hold people responsible anyway: if approve a bonus check to the CEO for a successful quarter and then find out that the success was built on murdering toddlers, the CEO still has the bonus check and there's nothing the shareholders can do to retract it.
I think a better solution is to admit the basic fact that people, not corporations, make decisions, and when people make unethical decisions, hold those people personally responsible. Stop trying to fiddle the knobs of your economic Rube Goldberg machine to get the invisible hand to hold people responsible, and hold people responsible.
Is this a novel concept?
Sounds like expropriation by another name, honestly.
I was told that in Monaco, if you are caught speeding in a supercar, your fine is much more than if you are caught speeding on your moped. I thought that seemed fair to me. Whether it is true or not is something I never looked up as I will never be in the situation of needing to know. If it's not true, then seems like a waste of a good idea that people seem to want to be true.
Speeding fines are often based on how much over the limit you are going, which is perfectly sensible given that reflects the danger and discourages petty over-enforcement of very low margin speeding.
Adding mass of the vehicle as a component to fines would also be a sensible measure to make the fine reflect the hazard.
while all of that might be true, I'm pretty sure none of that had anything to do with the supercar policy.
Yes. See GDPR (max fine 4% of global annual revenue) or the new EU Digital Services Act (max fine 6% of global annual revenue).
These are both fairly new laws, if you look at the laws they replace (which themselves may not even be that old), the fines are a huge leap up.
The corporations finance.the politicians, so no. It's all for show, and lines the pockets of the lawyers, who are the primary political class.
You can't. In a Capitalistic world, companies, large companies control the world. You are asking for the hand to cut itself. It might work for a few countries but is unthinkable for any medium-large countries when companies are allowed to grow to a certain extent.
Second this.
It's 5 minutes of revenue. They made it back 12X since an hour ago when the article hit HN.
For comparison, for a person making $100K per year, the fine was less than a dollar.
> 5 minutes of revenue. They made it back
'revenue' is not a complement to 'made it back', you have to look at profit for that.
That would even be okay if there were an understanding the fines would continue until the problematic behaviour stops, but it’s unclear from the article whether that’s actually the case.
> The fines against Amazon are small compared with the company’s size — it brought in $574 billion in revenue last year — but significant for a state labor agency. The Occupational Safety and Health Administration, the federal agency charged with preventing workplace safety issues, frequently investigates Amazon workplaces and has issued dozens of citations, but is severely limited in the size of fines it can bring.
I mean, so? And what is it limited by, given a limit on fines is essentially a limit on the size of the company that can be regulated?
A small rounding error.
They make that every 5 minutes
California: You're breaking the law. You must treat your employees better, or else!
Amazon: Oooohh, scary!!!
> California investigated two Amazon facilities near Los Angeles and in May found that the company failed to “provide written notice of quotas to which each employee is subject,” according to a copy of the citation shared with The Washington Post by the Warehouse Worker Resource Center, a nonprofit that advocates for improving working conditions at warehouses.
Very few workplaces have written quotas for employees. Be angry about Amazon or whatever, but let's just be real that if Amazon is guilty of heinous crimes for not giving workers a strict written quota, so are 98% of other employers, large and small.
> if Amazon is guilty of heinous crimes for not giving workers a strict written quota
The issue isn’t having or not having quotas. It’s having a quota and not telling employees about it.
Why is this a meaningful difference?
Any at-will employer could stack-rank and cut the lowest 5% of workers every month. Or adjust the quota every month at the 5th percentile. There's literally no difference to workers, it's always "make sure you are a bit better than the people other people applying for the job.
Because you are also not allowed quotas that won’t accommodate rest breaks. If the quota is secret you can’t enforce breaks.
This is pretty close to what temp agencies do at tech companies, i witnessed it at Google with multiple agencies and production quotas.
Did you read the article?
> “Undisclosed quotas expose workers to increased pressure to work faster and can lead to higher injury rates and other violations by forcing workers to skip breaks,”
What you're saying about:
> make sure you are a bit better than the people other people applying for the job.
Is literally that. It just adds pressure which leads to accidents. When you don't know the playing field, you're going to assume the worst and then work yourself to death. It's sad to see HN defending this approach.
The issue isn’t having quotas, I don’t think. It’s more the Office Space “minimum pieces of flair” aspect of hiding the rules from the employees.
> Very few workplaces have written quotas for employees
That's because they don't have quotas.
If they don't have a __written__ quota then they can't hold employees to a quota; it's as simple as that.