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July 25, 2006

CA: State Rules FedEx Drivers Employees, Not Contractors

For years, the delivery company FedEx has claimed that its ground drivers are not employees but independent contractors-- meaning the company didn't have to pay for workers compensation, unemployment insurance or a range of other worker protections.

But along with two Internal Revenue rulings, decisions by the California Unemployment Insurance Appeals Board have found that FedEx exercised such strict control over its drivers that their nominal independent status was a facade designed to undermine the labor rights of employees and evade millions in taxes owed the state.

FedEx is just a high profile example of an all too common abuse of workers by misclassifying them as independent contractors. States are increasingly proposing new legislation to tighten these rules to protect employees, as this gude to Combating Independent Contractor Misclassification in the States by the National Employment Law Project explains.

Posted by Nathan at July 25, 2006 01:39 PM