FedEx Ground makes change to independent contractor model

Pittsburgh Business Times - by Anya Litvak

Facing increasing pressure from states, Moon-based FedEx Ground has announced a change to its independent contractor model, which is the subject of dozens of class action lawsuits and 40 state tax proceedings.

On May 20, the company sent notices to its entire fleet of truck drivers informing them FedEx would not renew their contracts unless they register as corporations and treat their subcontractors as employees. The company’s 12,000 or so operators have at least 180 days to comply if they choose to incorporate. All new contracts will have to fit the rules starting in October.

“This decision is in response to recent concerns by several states,” the letter states. “Contracting exclusively with corporations that are registered with state authorities helps to ensure that contractors are complying with laws concerning the proper treatment of workers.”

FedEx Ground spokesman Patrick Fitzgerald said the company doesn’t know how many contractors already are compliant with the new standard.