Employment dispute with FedEx drivers heats up
A dispute over the employment status of FedEx drivers could be heating up.
Last week the company reported that the Internal Revenue Service had found that FedEx Ground drivers classified as independent contractors should be reclassified as employees and that the company could face taxes and penalties amounting to $319 million for 2002.
'On December 20, 2007, the Internal Revenue Service informed us that its audit team had concluded an audit for the 2002 calendar year regarding the classification of owner-operators at FedEx Ground. The IRS has tentatively concluded, subject to further discussion with us, that FedEx Ground's pick-up-and-delivery owner-operators should be reclassified as employees for federal employment tax purposes,' FedEx explained in a footnote to its quarterly earnings report filed with the Securities and Exchange Commission.
'The IRS has indicated that it anticipates assessing tax and penalties of $319 million plus interest for 2002. Similar issues are under audit by the IRS for calendar years 2004 through 2006.'
But FedEx said 'we believe that we have strong defenses to the IRS's tentative assessment and will vigorously defend our position, as we continue to believe that FedEx Ground’s owner-operators are independent contractors. Given the preliminary status of this matter, we cannot yet determine the amount or a reasonable range of potential loss. However, we do not believe that any loss is probable.'
Meanwhile, the Teamsters union cheered the decision.
'What a great Christmas gift to FedEx Ground workers who have suffered under FedEx's illegal independent contractor scam,' said Teamsters General President Jim Hoffa. 'It's game over for FedEx's independent contractor scam.' ' Chris Dupin
Employment dispute with FedEx drivers heats up
