One of my first assignments as an attorney was to research IRS materials and opine on whether our firm's client, a document delivery service, could classify its couriers as independent contractors. If anyone else has done this type of research, you also have read the wondrous letter rulings on all kinds of workers, including chick sexers. And of course, a year or so later, we all got a crash course in whether nannies, babysitters, and housekeepers are independent contractors or employees, thanks to critics of Zoe Baird and Kimba Wood.
Law.com today reports that this month a California trial judge has ruled that FedEx can no longer categorize its drivers as independent contractors under California employment law. This ruling directly affects 14,000 FedEx drivers, but it could affect many, many more drivers in the package delivery and courier industries. The article did not report whether FedEx had categorized the drivers as independent contractors for federal income tax purposes or whether this ruling would have any affect on that categorization. The cost of that change would be quite large in terms of social security payments, withholding, etc.
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1. Posted by Scott Moss on December 30, 2005 @ 12:42 | Permalink
It's notable that this was a wage-and-hour case. Under both federal wage law and many state wage laws, the line between "employees" and "independent contractors" is different than the line drawn by most other statutes and the common law. Specifically, a lot of workers who at common law would be "independent contractors" are, under the wage laws, deemed "employees." That distinction stems partly from the broader statutory definition of "employment" contained in the wage laws, but also from the purposes of the statute (to prevent misclassification as non-employees for purposes of evading wage obligations). So this ruling doesn't necessarily extend to other types of "employee vs. independent contractor" claims, like disputes as to tax treatment, benefits eligibility, etc.
2. Posted by Paul Higgs on November 24, 2006 @ 6:04 | Permalink
Its interesting to see that some services are now available to reduce the chances of wrongly classifying employees as IC's... check out www.emptyvan.com
3. Posted by courier philippines on January 9, 2009 @ 16:16 | Permalink
I agree to Scott Moss,It's notable that this was a wage-and-hour case. Under both federal wage law and many state wage laws, the line between "employees" and "independent contractors" is different than the line drawn by most other statutes and the common law,anyway just keep the good work.