Those FedEx trucks might even be driving faster to make up for a hefty fine from the Commonwealth of Massachusetts. The state’s attorney general’s office announced it was slapping the delivery company with a $190,000 fine for depriving “employees” workers compensation benefits, the Associated Press reported.
Martha Coakley, state attorney general, said the “independent contractor” classification violated the state's Independent Contractor Law, and unfairly deprived drivers health care, workers' compensation and overtime wages. By not classifying the drivers as “employees,” Pittsburgh-based FedEx Ground Package Systems Inc. was depriving Massachusetts of tax revenue by failing to deduct and withhold taxes.
Maury Lane, spokesman for FedEx Ground's Memphis, Tenn.-based parent, FedEx Corp., said drivers were properly classified and planned to appeal. FedEx Ground has 400 drivers in Massachusetts.
FedEx drivers have filed suit in 12 other states to be classified correctly under the law. In October, a federal judge in Indiana approved class-action status for a lawsuit filed on behalf of 14,000 FedEx drivers.
Interestingly, FedEx's “independent-contractor” drivers own their trucks and delivery routes but have to pay operating costs such as vehicle maintenance, insurance and fuel. These drivers can subcontract to other drivers, thus increasing their base-rate income from FedEx.