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FedEx US 'intentionally misclassified' drivers as independent contractors
3.01.08 by Buffalo Bill

Sounding an ominous and very loud echo of the ongoing citysprint case here in Blighty, the Inland Revenue Service of the US has ‘tentatively decided’ that FedEx owes back-taxes to the tune of $319 million, due on drivers that were misclassified as ‘independent contractors’, instead of employees.

FedEx Watch, a web-site run by the Teamsters Union, hails the decision thus:

The cause of the FedEx Ground and Home Delivery drivers is undeniably just: the offer of independence was made under false pretenses and FedEx misled the drivers into a relationship where they were illegally controlled like employees. Many many drivers fell victim to a bait and switch. The core issue is that drivers want to be truly independent or they want the rights and protections that all employees are entitled to and and have earned. Since FedEx has proved repeatedly they will not grant drivers more than token independence, then the just fight is for drivers to take back their rights.

A few weeks ago, Moving Target asked if it could happen here, and would it be a good thing?, referring to the moves in the US to reclassify ‘independent contractors’ as employees. Thanks to citysprint, and the GMB Union, it seems that we could be about to find out. citysprint are obviously taking the case very seriously, as they have employed the infamous libel lawyers, Carter-Ruck, to fire off a letter to the GMB. I am sure that all my readers will be as interested in the outcome of the citysprint case as I am. If the GMB win, it will fundamentally change the nature of the relationship between citysprint and its riders. And, given that citysprint do things pretty much the same as every other company in the courier business, the relationship between all courier companies and their riders.

  1. I would be very interested in how this develops.

    I’ve said it before on here that if there is a reclassification of self employment/employed paye as a messenger then it could be more damaging to the job than anything else.

    I just can’t see how any company could afford the insurance to cover the bicycle riders. motorbike riders maybe as they have an insurance structure already in place: Ie you have to have a liscence and insurance to even drive a motorbike in the first place.

    So what would fully independant mean?

    Completely open radio channels?
    Free call between companies?
    The ability to work for more than one company at once (wow more than one radio/pda????!!!)?

    Isn’t going to happen is it?

    I see it thus:
    Only the biggest companies will be able to afford the insurance to run a bicycle fleet.
    The big companies will absorb all the small ones’ bicycle work and the riders that are deemed “good” (co-operative, dumb, desperate delete as applicable) enough will be put on the pay roll.

    Obiligatory uniform.
    Company provided bag.
    Company provided bike (?)

    They will be classed as part time employees so avoid sick pay, and will have to work damn hard to get the inevitable performance related bonuses. Fail to meet those and it will be minimum wage (as is the case that minimum drop rates are proportionally the lowest they have ever been and people are prepared to work for them then why pay more?)

    You would no longer have the ability to throw your radio in (albeit at the loss of a weeks pay) as you’d probably be paid monthly which would be docked if you quit.

    pessimistic?
    maybe, but not to far from what could be the case.

    It’s a badly paid job with a lot of shit involved at the moment, but I don’t see the reality of PAYE messengering as any better at all.


    — nomoreknees    3 January 2008, 23:26    #
  2. Very interesting ideas. I’m not even in the industry and I’m looking forward to how this will play out.


    David    4 January 2008, 00:55    #
  3. A 2004 survey of London bicycle messengers determined that the average daily wage was £65. This is on or below what London’s Mayor set as a ‘living wage rate’: £7.20/hour.

    See here


    — Bill    4 January 2008, 08:57    #
  4. “The ability to work for more than one company at once (wow more than one radio/pda????!!!)?”
    Didn’t Gertie work for two ‘open call’ circuits about 8 years ago? Two radios at once, impressive.


    — ifbm    4 January 2008, 08:59    #
  5. And now there’s no open call companies at all and the only way to make reasonable money is to work for a company that sets your hours, makes you wear uniform & sacks you if you don’t show up, see Gertie along with all the rest doing that now, and he left AZ over 8 years ago so a bit further back I think.

    But nmk is right employment would not help, but maybe a ruling that says either we are self-employed with some of the freedom that should entail or else employed might.

    And something needs to be done about tax, deducted at source with a reimbursement at end of year would be better because the current system leaves everyone f~~~~~d in the end.


    — 1    4 January 2008, 16:01    #
  6. noknees, it’s illegal to dock money earned from a salaried employee if they quit, but perfectly legal to withold payment from a non-performing contractor. If nothing else, when you throw your radio in you’ll be better off.


    — 8ace    5 January 2008, 11:56    #
  7. Oh, and something else – charging employees for equipment that they are required to use for the job is illegal also – no uniform, pda or radio charges.


    — Bill    5 January 2008, 12:31    #
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