Fedex Overtime Lawsuit Attorney

Why Making Fedex Ground Drivers Independent Made Business Sense

Much has been made of all the controversy that surrounds the classification of Fedex Ground delivery drivers as independent contractors, but one aspect of this situation that does not seem to receive much attention is the business motivation behind it. We'll explain the basics of this historic shift below, and perhaps those who feel that they've been wrongfully classified as contractors will begin to understand why they're in their current position instead of working as a benefit-garnering employee.

Cost/Benefit/Discretionary Funds

Simply put, it's a lot less expensive to hire people as independent contractors as opposed to employees. The reasons are several in number. First, when considering the fact that at any given time there are approximately 15,000 Fedex Ground drivers on the road, one needs to add the potential total liability in terms of payroll taxes for that many employees. Basically, it would be millions of dollars at a minimum every year, and instead of paying all of those taxes to state and federal governmental bodies, it goes back into the company coffers to be used however the upper management team at Fedex Ground sees fit.

Benefits

There are several laws in place, both on the state and federal levels, that require major employers to offer some sort of benefits package to its workers. Generally speaking, when a company reaches a certain number of employees, statutory jurisdiction begins to take hold, and the company must follow a heightened level of scrutiny from the government in regards to health insurance, FMLA compliance, wage issues, workers' compensation contributions and a whole host of other operation-related costs.

By keeping the number of "employees" low, Fedex Ground does not have to spend nearly as much money on the benefits offered to its people, and just like with the avoidance of payroll taxes, this leaves a huge amount of discretionary funds available for the company for marketing, business development and other purposes.

"Other Purposes"

Perhaps some of that money saved went towards political contributions. During the 2006 campaign, the country watched and voted as the Republican majority attempted to maintain control of the legislative branch. During this campaign, Fedex Corp. gave two-thirds of its donation money to Republicans.

Lately, that dynamic has shifted since the Democrats have taken over the legislative majority, while Fedex Ground was simultaneously losing case after case in civil court when the issue centered on whether Fedex Ground drivers were employees or contractors. So far in 2007, almost 60% of Fedex Corp.'s contributions have gone to Democrats.

As you see, most decisions made by a big company are not done so in a vacuum. Everything is related to everything else, and this is something for those people who feel that they have been wrongfully classified by Fedex Ground to consider. If you would like to explore your legal rights in regards to this situation, contact the Fedex overtime attorneys at Pulaski & Middleman today to schedule a consultation.