© 2025 American Payroll Institute, Inc.
April 21, 2025 Volume 27 Issue 8
Virginia Supreme Court Rules Amazon Flex Drivers
Are Employees for UI Purposes
The Supreme Court of Virginia held that Amazon failed to
establish that drivers for one of its app-based programs
were independent contractors and not employees [Amazon
Logistics, Inc. v. Virginia Employment Commission, No.
230865 (Va., 3-6-25)]. Therefore, the drivers were eligible for
unemployment insurance (UI) benefits, and Amazon owed
UI taxes on their wages.
Amazon Flex hired drivers as contractors
Amazon Flex is an app-based program that allows
participants to sign up to be delivery drivers for Amazon. The
drivers download the app on their personal smartphones,
select 3- to 4-hour shifts in which to work, and use their
own vehicles for deliveries. Donald Diggs worked for
Amazon Flex as a delivery driver from 2017 to 2018. In 2018,
he transitioned to a warehouse position as an Amazon
employee. Soon after moving to the warehouse, Diggs
separated from employment and filed for UI benefits with
the Virginia Employment Commission (VEC).
The VEC denied Diggs’ claim, stating that he had not
established sufficient earnings to be entitled to UI benefits.
In response, Diggs’ submitted Forms 1099 from his work
driving for Amazon Flex as proof of his income. The Forms
1099 had been issued by Amazon.com. This triggered an
investigation by the VEC into whether Amazon owed UI tax
for Amazon Flex drivers.
Evidence showed drivers were employees. The VEC
held a hearing before a special examiner to determine
whether Amazon Flex drivers were employees. Amazon
presented the Amazon Flex contract and testimony from
a senior manager at Amazon as evidence to show that the
drivers were independent contractors. The senior manager
testified that the “agreement and app-specific procedures
applied equally to all Flex drivers who signed up for the
program.” The special examiner of the hearing concluded
that Diggs was an employee because Amazon exerted
control over the Flex drivers. Amazon was ordered to pay
UI taxes for the other Amazon Flex drivers who had been
misclassified as independent contractors.
On appeal, the court held that the special examiner was
correct that Diggs was an employee and that “extending the
decision to all Flex drivers was proper because ‘the terms
and conditions of the Agreement apply equally to all Flex
drivers.’”
Amazon failed to prove drivers were independent
contractors
The Virginia Supreme Court also held that the special
examiner was able to find that all the delivery drivers were
employees. Amazon’s main argument to the Supreme Court
was that there was not sufficient evidence for the special
examiner to make a determination for any of the drivers
besides Diggs. The court rejected this argument because
the evidence that Amazon provided was identical among
all of the drivers and Amazon had argued that the special
examiner should have determined that all the drivers were
independent contractors.
Evidence applied to all drivers. In the hearing before
the special examiner, Amazon had provided the Amazon
Flex Agreement that applied to all of the Flex drivers. The
agreement Amazon provided was not a specific agreement
that only Diggs had signed. Amazon did not argue that the
contract that applied to Diggs was different from any other
driver. The senior manager testified that the agreement
applied to all of the Amazon Flex drivers and that the same
policies for the app applied equally to all drivers.
Vermont Retirement Savings Program Begins in July,
Includes Payroll Deductions
A Vermont retirement program requiring automatic payroll
deductions will be going into effect starting July 1, 2025.
The legislation was passed in 2023 [S.B 123, L. 2023]. Covered
employers were required to enroll with the program by March
1, 2025. Employers will be required to automatically enroll
employees with the option to opt out of the program.
The contributions will go toward Roth Individual
Retirements Accounts (IRAs), administered by the Office of the
Vermont State Treasurer. The program, Vermont Saves, has a
website that provides employers with additional information
including employer and employee FAQs.
Employee coverage
Vermont Saves covers employees who are 18 years or
older and who receive compensation in Vermont. Part-time,
seasonal, and temporary employees are covered to the extent
permitted by the state treasurer. Employees who have earned
taxable wages from a Vermont employer for at least 500 hours
are covered by the program. Employees who live in other
states are eligible for the program if their employment is based
in Vermont.
Certain employees are excluded including: employees
of the federal or state governments, employees of any of the
April 21, 2025 Volume 27 Issue 8
Virginia Supreme Court Rules Amazon Flex Drivers
Are Employees for UI Purposes
The Supreme Court of Virginia held that Amazon failed to
establish that drivers for one of its app-based programs
were independent contractors and not employees [Amazon
Logistics, Inc. v. Virginia Employment Commission, No.
230865 (Va., 3-6-25)]. Therefore, the drivers were eligible for
unemployment insurance (UI) benefits, and Amazon owed
UI taxes on their wages.
Amazon Flex hired drivers as contractors
Amazon Flex is an app-based program that allows
participants to sign up to be delivery drivers for Amazon. The
drivers download the app on their personal smartphones,
select 3- to 4-hour shifts in which to work, and use their
own vehicles for deliveries. Donald Diggs worked for
Amazon Flex as a delivery driver from 2017 to 2018. In 2018,
he transitioned to a warehouse position as an Amazon
employee. Soon after moving to the warehouse, Diggs
separated from employment and filed for UI benefits with
the Virginia Employment Commission (VEC).
The VEC denied Diggs’ claim, stating that he had not
established sufficient earnings to be entitled to UI benefits.
In response, Diggs’ submitted Forms 1099 from his work
driving for Amazon Flex as proof of his income. The Forms
1099 had been issued by Amazon.com. This triggered an
investigation by the VEC into whether Amazon owed UI tax
for Amazon Flex drivers.
Evidence showed drivers were employees. The VEC
held a hearing before a special examiner to determine
whether Amazon Flex drivers were employees. Amazon
presented the Amazon Flex contract and testimony from
a senior manager at Amazon as evidence to show that the
drivers were independent contractors. The senior manager
testified that the “agreement and app-specific procedures
applied equally to all Flex drivers who signed up for the
program.” The special examiner of the hearing concluded
that Diggs was an employee because Amazon exerted
control over the Flex drivers. Amazon was ordered to pay
UI taxes for the other Amazon Flex drivers who had been
misclassified as independent contractors.
On appeal, the court held that the special examiner was
correct that Diggs was an employee and that “extending the
decision to all Flex drivers was proper because ‘the terms
and conditions of the Agreement apply equally to all Flex
drivers.’”
Amazon failed to prove drivers were independent
contractors
The Virginia Supreme Court also held that the special
examiner was able to find that all the delivery drivers were
employees. Amazon’s main argument to the Supreme Court
was that there was not sufficient evidence for the special
examiner to make a determination for any of the drivers
besides Diggs. The court rejected this argument because
the evidence that Amazon provided was identical among
all of the drivers and Amazon had argued that the special
examiner should have determined that all the drivers were
independent contractors.
Evidence applied to all drivers. In the hearing before
the special examiner, Amazon had provided the Amazon
Flex Agreement that applied to all of the Flex drivers. The
agreement Amazon provided was not a specific agreement
that only Diggs had signed. Amazon did not argue that the
contract that applied to Diggs was different from any other
driver. The senior manager testified that the agreement
applied to all of the Amazon Flex drivers and that the same
policies for the app applied equally to all drivers.
Vermont Retirement Savings Program Begins in July,
Includes Payroll Deductions
A Vermont retirement program requiring automatic payroll
deductions will be going into effect starting July 1, 2025.
The legislation was passed in 2023 [S.B 123, L. 2023]. Covered
employers were required to enroll with the program by March
1, 2025. Employers will be required to automatically enroll
employees with the option to opt out of the program.
The contributions will go toward Roth Individual
Retirements Accounts (IRAs), administered by the Office of the
Vermont State Treasurer. The program, Vermont Saves, has a
website that provides employers with additional information
including employer and employee FAQs.
Employee coverage
Vermont Saves covers employees who are 18 years or
older and who receive compensation in Vermont. Part-time,
seasonal, and temporary employees are covered to the extent
permitted by the state treasurer. Employees who have earned
taxable wages from a Vermont employer for at least 500 hours
are covered by the program. Employees who live in other
states are eligible for the program if their employment is based
in Vermont.
Certain employees are excluded including: employees
of the federal or state governments, employees of any of the
