Walmart to Pay $100 Million, Overhaul Spark Driver Pay After Regulators Allege Tip and Earnings Deception

Walmart has agreed to pay $100 million and revamp how it pays gig workers and handles customer tips on its Spark Driver platform, resolving allegations from federal and state regulators that the retailer misled drivers and shoppers for years.

In a complaint filed Feb. 26 in the U.S. District Court for the Northern District of California, the Federal Trade Commission and a coalition of 11 state attorneys general, along with the district attorney in Alameda County, California, accused Walmart of using deceptive app screens and opaque pay practices that shortchanged drivers and diverted some customer tips away from workers.

Walmart did not admit wrongdoing in the proposed stipulated judgment and permanent injunction. Under the deal, the company would also be subject to 10 years of federal oversight of its Spark Driver operations.

The case—Federal Trade Commission, et al. v. Walmart Inc., Case No. 3:26‑cv‑01655—is among the most prominent efforts by regulators to police gig-economy pay representations through traditional consumer-protection authority. It also adds scrutiny to tip practices in app-based delivery, where customers often assume gratuities flow directly to workers.

Regulators say promises didn’t match pay

Spark Driver, launched in 2018, is Walmart’s app-based platform that uses independent contractors to deliver online grocery and retail orders from stores to customers’ homes. Drivers accept “offers” in the app showing an estimated payout, usually broken into Walmart base pay plus an expected customer tip.

Regulators alleged that what drivers saw on-screen frequently did not match what they ultimately received.

According to the complaint, Walmart allegedly:

• Displayed tips as if guaranteed in offers without clearly disclosing that tips were not preauthorized on customers’ cards; when a tip charge later failed, drivers did not receive that portion of the advertised pay.
• Split a single customer tip among multiple drivers when an order was divided, without clearly disclosing to drivers that the tip shown might be shared, and without making clear to customers that “100% of tips” would not necessarily go to one driver.
• Reduced base pay and/or tips on batched orders after drivers accepted them when Walmart removed one or more deliveries from the route—sometimes notifying drivers only after the work was completed.
• Advertised referral and other incentive bonuses without plainly disclosing all conditions required to qualify, and in some cases failed to pay bonuses even when disclosed requirements were met.

The FTC and states also said Walmart misled customers by advertising that “100% of tips go to the driver” while on multiple occasions keeping some or all of those tips instead of passing them on to drivers or refunding customers.

“Labor markets cannot function efficiently without truthful and non-misleading information about earnings and other material terms,” Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said in announcing the case. “Today’s settlement reflects the Trump‑Vance FTC’s focus on ensuring a healthy labor market for American workers, which is critical to the nation’s success.”

Pennsylvania Attorney General Dave Sunday said Walmart was aware “almost immediately” of problems that led drivers to be paid less than they expected “yet did nothing to remedy the situation.”

North Carolina Attorney General Jeff Jackson said Walmart “misled its drivers and its customers so that the company could keep tips and other money that belonged to drivers.”

The alleged conduct covers offers made and deliveries performed between Jan. 1, 2021, and Feb. 26, 2026.

Where the $100 million will go

Under the proposed settlement, up to $79 million of the $100 million judgment would go to current and former Spark drivers nationwide. $11 million would go to the participating states, and $10 million would fund FTC-administered refunds to customers whose tips or related charges were misdirected.

State officials said Walmart has already paid out a large share of the $79 million to drivers, with the settlement confirming and completing those payments and setting aside additional funds for drivers who have not yet been identified or compensated.

Nearly 1 million people have used Spark to complete more than 272 million deliveries since the program began, according to figures cited by state attorneys general. Eligible drivers generally would not have to file individual claims; instead, payments would be calculated using Walmart’s internal data on completed offers and payouts.

The participating states are Arizona, California, Colorado, Illinois, Michigan, North Carolina, Oklahoma, Pennsylvania, South Carolina, Utah and Wisconsin. The Alameda County district attorney also joined the action.

New rules for Spark Driver

Beyond the monetary settlement, the proposed order would impose detailed compliance obligations on Walmart.

Walmart would be required to create and maintain an earnings verification program to regularly check that drivers are paid the base pay, tips and incentives shown in offers, provided drivers meet the stated conditions. The company would be barred from misrepresenting expected earnings, how tips are calculated or split, or what is required to earn bonuses.

The order would also prohibit Walmart from reducing drivers’ base pay, incentive pay or tips after an offer has been accepted, except in limited, clearly defined circumstances—such as a customer canceling an order or a driver failing to complete the job. Any circumstances that could lead to a reduction would have to be disclosed in advance.

For at least 10 years, Walmart would also have to file annual compliance reports with the FTC and keep detailed records allowing regulators to audit Spark Driver pay and tip practices.

The complaint alleges violations of Section 5 of the FTC Act, which bars unfair or deceptive acts or practices, and provisions of the Gramm‑Leach‑Bliley Act related to deceptive practices involving financial information. Each participating state also alleged violations of its own consumer-protection laws.

Walmart responds, denies wrongdoing

Walmart said it disagrees with regulators’ characterization but chose to settle to avoid lengthy litigation and to focus on improving its services.

The company has emphasized in public statements that it has already issued compensation to affected drivers and is committed to improving transparency and fairness in pay through verification systems and clearer disclosures. Walmart did not admit liability under the stipulated order.

Based in Bentonville, Arkansas, Walmart has expanded its e-commerce and delivery operations in recent years, with Spark central to its last-mile delivery strategy.

Part of a broader crackdown on gig pay and tips

The Spark case follows other enforcement actions targeting how gig-economy companies handle tips and represent pay. In 2021, Amazon agreed to pay $61.7 million to settle FTC allegations that it withheld some tips from Amazon Flex drivers while telling customers tips would go “100%” to workers. DoorDash has separately settled tip-related cases with the District of Columbia and New York, which alleged customer tips were used to subsidize base pay.

Like those cases, the Walmart action centers on the claim that what customers saw on tip prompts—and what workers saw in their apps—did not match how money ultimately moved.

Regulators say the settlement will deliver payments now and push platforms toward clearer, more reliable disclosures about what an offer is worth—and where customer tips actually go.