Financial Police conduct investigations at Amazon partners  2,416 employees checked at 133 Amazon service providers – 987 formal complaints filed

Results of investigation reveal network of companies consisting of numerous subcontractors and sub-subcontractors

In mid February 2020, around 60 officers from the Financial Police undertook an investigation at the Amazon distribution centre in Großebersdorf near Vienna, conducting checks on employees of subcontractors working for the online retailer. The audited companies were parcel delivery firms delivering consignments for Amazon in Vienna and the surrounding area.

Breaches of employment law were immediately identified on site, including violations of the Act on Wage and Social Dumping and the Act Governing the Employment of Foreign Nationals. For the purpose of further detailed analysis, numerous documents and records, in particular driver lists and order books, were confiscated and then inspected, compared, checked and assessed by the Financial Police in the context of meticulous investigation work. "It is a general principle that all companies in Austria must comply with the rules, and the vast majority indeed do so. However, it is also clear that corporate responsibility does not end at the loading ramp; it also pertains to lawful business operations on the part of partners and suppliers. We will clamp down hard on systemic attempts aimed at undermining fair competition. The pressure exerted by our control operations is intended on the one hand to lead to a rethink as far as questionable business practices are concerned, and on the other hand to protect domestic retail. Our aim is to strengthen honest companies and remove offenders from the market," commented Finance Minister Gernot Blümel on the success of the investigations.

In total, 76,605 available datasets were evaluated. The team from the Hollabrunn Financial Police, which undertook the investigations in the case throughout the process, from detailed analysis to filing charges, can now look back on an impressive outcome to the investigation. In total, since mid February, 2,416 employees at 96 subcompanies and a further 24 sub-subcompanies have undergone checks by the Financial Police. However, Amazon Austria only has 13 direct contract partners, as the unravelling of the network of companies, subcontractors and further sub-subcontractors has so far revealed. 1,188 of the individuals checked were EU nationals, 1,228 were third-country nationals, while 687 were engaged part-time, and 237 were recorded as part-time on a casual basis (in 'mini-jobs').

987 formal complaints filed – Financial Police put forward penalties totalling EUR 767,440, attachment orders amounting to EUR 325,192, and payment orders of EUR 88,421

  • In detail, the Financial Police identified the following numerous offences:
  •   468 breaches of the General Social Security Act (total amount of penalty requested by the Financial Police, EUR 752,440);
  • 144 breaches of the Unemployment Insurance Act;
  • 12 breaches of the Act Governing the Employment of Foreign Nationals (total amount of penalty requested by the Financial Police, EUR 12,000)
  •  3 breaches of the Act on Wage and Social Dumping (total amount of penalty requested by Financial Police, EUR 3,000); and
  • 1 breach of the Trade Code.

Furthermore, 96 instances of social welfare fraud were reported.

In addition, the following actions were taken:

  •   195 investigation reports sent to the Public Employment Service (AMS);
  •   68 investigation reports sent to the Austrian State Health Insurance Fund (ÖGK); and
  •  18 requests issued for the conduct of statutory business audits.

To date, the Financial Police have issued seven attachment orders in a total sum of EUR 325,193, plus payment orders totalling EUR 88,421. "I cannot recall any official control where we have come across so many violations of the law. This is unprecedented. Indeed, it would barely be feasible to work for such low rates of pay without working unlawfully", is how the Head of the Financial Police at the Ministry of Finance, Wilfried Lehner, summarised the situation.

EUR 189,003 in welfare benefits and basic welfare support unlawfully claimed

Of the total number of 350 refugees and those granted subsidiary protection who underwent controls at the Amazon service providers, in the case of 93 individuals, a conflict was identified in that they were both claiming basic welfare support  and working in connection with Amazon. These 93 individuals were reported as suspected cases to the Federal Ministry of the Interior. The Public Employment Service (AMS) confirmed a figure of EUR 163,773 for Vienna and EUR 21,989 for Lower Austria by way of unlawfully-received welfare benefits (unemployment benefit and emergency unemployment assistance).

"Subcontractors and sub-subcontractors with small structures not only enable online retailers to have flexibility in coping with a rise in shipment volumes, but they also present those using their services with challenges in terms of agreements on corporate responsibility and commercial interests. Due to the considerable pressure they are under, repeated lapses occur in this area," concluded Blümel.