Amazon Fights States on Defining Quotas in Warehouse Safety Laws

Amazon.com Inc.’s famously fast-paced delivery model has encountered increasing scrutiny from lawmakers who say its work-speed quotas worsen the injury-prone nature of warehouse jobs, yet even after being fined by two states the ecommerce giant’s response has remained: What quotas?

Five states so far have enacted limits on large warehouse operators’ use of employee performance mandates that the states define as quotas. But Amazon—the primary target of these laws’ supporters—says it evaluates warehouse workers based on comparisons with their peers and flexible expectations that factor in tenure and safety considerations, not quotas.

The laws require that companies clearly disclose expected productivity rates to workers and ensure they don’t interfere with breaks and safety standards. Similar federal legislation has been proposed in Congress.

The company’s pushback against fines of $5.9 million in California and $10,500 in Minnesota announced last month highlights a growing challenge for policymakers and uncertainty for businesses—how to regulate employers’ use of fast-evolving technology for employee monitoring, evaluation, hiring, and firing.

A performance evaluation system like Amazon’s “muddies the waters a little bit” for regulators and corporate compliance efforts, said Aarti Chandan, an employer-side attorney at Bond Schoeneck & King in Buffalo, N.Y.

“It’s tricky for an employer in that situation to provide written notice” of the expected productivity levels “because it might change day to day,” she said.

State and federal policymakers have targeted the warehouse industry and Amazon specifically in various ways, including safety citations issued by the US Occupational Safety and Health Administration. A Senate committee investigation led by Sen. Bernie Sanders (I-Vt.) said in a July 16 report that injury rates spiked among Amazon workers during peak times for online shopping.

OSHA also announced a nationwide emphasis program starting in July 2023 to focus on improving safety in warehouses, high-risk retail settings, and similar workplaces.

Amazon has appealed the OSHA citations and disputes the Senate committee report, saying its injury rates have improved substantially since 2019.

The company is known for its advanced use of automated and algorithmic technology, including in its monitoring of employee performance. Worker advocates say such technology raises a kind of “black box” risk that employees might be evaluated and fired based on metrics that they don’t know or understand.

“This problem is only getting worse as tech makes it cheaper for companies to surveil and push workers,” said Tim Shadix, legal director at the California-based advocacy group Warehouse Worker Resource Center, which aided the California labor commissioner’s office in investigating Amazon.

Scope of Quota Laws

The quota laws tend to target mid-size and larger warehouse operators with at least 100 employees at one warehouse or more than 1,000 across multiple locations.

They potentially apply to companies such as Walmart Inc. and TJX Companies Inc., which the National Employment Law Project noted among the country’s largest warehouse operators.

Still, Walmart’s warehouse workforce is a fraction of Amazon’s, according to a NELP analysis of federal data. And legislators consistently point to Amazon’s higher-than-average workplace injuries as their inspiration.

TJX and Walmart didn’t respond to requests for comment on their warehouse operations.

“We saw the astronomical injury rates happening at Amazon warehouses in Minnesota that were twice the rate of other warehouses,” said state Rep. Emma Greenman (D), who sponsored Minnesota’s legislation in 2023. “When you read the bill, it is pretty clear that when you have a performance standard, sort of broadly defined, you have to tell them what that performance standard is, you have to give them access to their data, and it can’t interfere with their other legal rights.”

But Amazon says the state laws are based on a faulty premise.

“The truth is, we don’t have fixed quotas,” spokesperson Sharyn Ghacham said by email. “At Amazon, individual performance is evaluated over a long period of time, in relation to how the entire site’s team is performing.”

Digital kiosks in each warehouse let workers check their performance metrics and compare to their coworkers, Ghacham said.

California’s law defines a quota as a requirement “to perform at a specified productivity speed, or perform a quantified number of tasks, or to handle or produce a quantified amount of material, within a defined time period,” with the threat of termination or other penalty if workers fail.

Amazon has closely monitored worker productivity and “time off task” by tracking their handheld electronic scanners, and it fired those who don’t meet expectations, sometimes after warnings and retraining, according to reports including from Bloomberg.

An Amazon worker told Connecticut lawmakers in 2023 that he was expected to pack 200 boxes per hour. Washington state regulators have been investigating the company’s injury rates for several years, as Amazon appeals workplace safety citations there.

Musculoskeletal Injuries

Some state laws targeting Amazon attempt to prevent repetitive-motion injuries by also mandating ergonomic measures. New York lawmakers followed up on their 2022 quota law with this year’s ergonomic safety legislation that is awaiting Gov. Kathy Hochul’s (D) signature.

That New York legislation would require warehouse employers to consult with an outside expert such as an industrial engineer and worker representatives on a reasonable work-speed quota. That’s already standard practice for warehouses with unionized work forces, said Marc Wulfraat, an industry consultant.

Amazon’s warehouses are not unionized, with the exception of one Staten Island facility.

Closely measuring workers’ productivity is a decades-old practice in warehousing, Wulfraat said. But Amazon has applied monitoring technology and partial automation in ways that throttle work-speed expectations, he said.

“They’ve put it on steroids, and they get rid of people when they don’t perform,” Wulfraat said.

Even before the quota laws, employers faced litigation over the alleged effects of their high-productivity expectations. Amazon defeated one such case in January 2023, when a federal court rejected claims that the company discriminated against older workers via performance standards that put them at a higher risk of injury.

California, Minnesota Citations

The fines announced last month against Amazon are the first made public under this new breed of state law since California first enacted it in 2021.

The California labor commissioner alleged more than 59,000 violations at two Amazon facilities in Moreno Valley and Redlands. The state says Amazon failed to disclose quotas to workers, despite the company’s objections that its performance standards aren’t quotas.

“The peer-to-peer system that Amazon was using in these two warehouses is exactly the kind of system that the Warehouse Quotas law was put in place to prevent,” Labor Commissioner Lilia García-Brower said in a June 18 statement announcing the fines. She referred to Amazon’s evaluation of workers based partly on comparison with their coworkers.

Performance expectations can take many forms, so it’s entirely possible a warehouse operator sets expectations that don’t qualify as quotas, said Bill Wahoff, an employer-side attorney with Steptoe & Johnson in Ohio. Nonetheless, the laws create tough compliance hurdles for business models based on delivering packages on the same day or one day after orders, he added.

“This is a lot more intrusive on the employer’s operations” than most workplace safety laws, Wahoff said.

Early Days for Enforcement

It remains to be seen how aggressively states will enforce the warehouse worker laws and whether they can make the citations stick.

Since New York’s law took effect in 2023, the state’s labor department has received 28 complaints of possible violations and closed five without citations. The other 23 remain under investigation, a department spokesperson said, declining to elaborate.

Washington state’s law took effect July 1, and Oregon’s law enacted this year hasn’t yet taken effect.

The state’s quota law is meant to prevent warehouse employees from being penalized for missing performance expectations that weren’t clear, said Ellen Saline, a senior policy manager at the Washington Department of Labor & Industries.

“Something doesn’t have to be called a quota to be considered a quota under the law,” she said. “If it’s a work-based performance standard, it’s covered.”

—with reporting assistance from Andrew Oxford in Sacramento