First reported by the Los Angeles Times, the company agreed to pay the fine and improve the way it tracks cases and notifies workers and local health agencies.
Amazon must also inform its warehouse workers in California of the "exact number of new Covid-19 cases in their workplaces" when cases arise, reports The Verge.
California Attorney General Rob Bonta said that the penalty comes after a complaint filed against Amazon alleged that the company did not properly notify warehouse workers and local health agencies about new Covid-19 cases "often leaving them in the dark and unable to effectively track the spread of the virus".
This is the first fine related to California's Covid "right to know" (AB 685) legislation, which was passed last year in response to the Covid-19 pandemic, the LA Times reported.
Under the law, employers are required to alert workers who were potentially exposed to Covid-19 within one day, and must also report Covid-19 case numbers to local health agencies within 48 hours if they "meet the definition of a Covid-19 outbreak".
"As our nation continues to battle the pandemic, it is absolutely critical that businesses do their part to protect workers now -- and especially during this holiday season," Bonta said.
"Californians have a right to know about potential exposures to the coronavirus to protect themselves, their families and their communities."
Amazon was criticised for its treatment of workers throughout the pandemic. Last March, Michigan warehouse workers were angered when Amazon failed to notify them that their co-worker had Covid-19, meanwhile, workers in New York staged walkouts in reaction to Amazon's handling of the pandemic.