there goes this years bonus

[dabluzman1]

Seems the IRS doesnt agree with how FEDEX treats its employees errrr I mean contractors errrrrrr I mean employ.....oh helzbells, whatever we are, to the tune of 319 million dollars in fines for just the year 2002.
Stay tuned sports fans.
dabluzman

 

[terryandrene]

When people mention FedEx in these expediter forums, many of the readers will infer that the author is refering to FedEx Custom Critical. That may include this thread, but it in no way applies to The expediting operating company of FedEx.

There has been much controversy and legal action related to the FedEx Ground Independant Contractors being classified as employees and that any IRS ruling affecting FedEx Ground Owner/operators would be translated to apply to FedEx Custom Critical, as well. NOT TRUE. The FedEx Ground Contractors own their own tractors and haul FedEx Ground owned trailers on prescribed routes during specific times and wear uniforms required by their contract. That isn't even close to the requirements of the FedEx Custom Critical lease agreements.

Here is a copy of a Reuters article which discusses the topic of this thread.

LOS ANGELES, Dec 21 (Reuters) - Fedex Corp (FDX.N: Quote, Profile , Research) said on Friday that the U.S. Internal Revenue Service found that its FedEx Ground independent contractors should be reclassified as employees for tax purposes and that the company faced related taxes and penalties of more than $319 million for 2002.

The IRS is auditing similar issues for 2004 through 2006, the package delivery company said in the filing with the U.S. Securities and Exchange Commission.

"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," Fedex said in the filing.



The company also said that it has "strong defenses to the IRS's tentative assessment and will vigorously defend" its position that FedEx Ground's owner-operators are independent contractors.

The filing came a day after Memphis, Tenn.-based FedEx warned that it faces "increase regulatory and legal uncertainty" over the independent contractor model it uses at FedEx Ground, which could result in higher costs. The company is fighting against a number of lawsuits claiming these contractors should be classified as employees.

FedEx shares rose 66 cents, or 0.7 percent, to close at $94.29 on the New York Stock Exchange. (Reporting by Julie Vorman in Washington and Nichola Groom in Los Angeles, editing by Leslie Gevirtz)


© Reuters 2007. All Rights Reserved.

 

[dabluzman1]

So are you saying the BONUS will be in the mail after all?

Now on the serious side, do you really believe what happens to Fedex Ground will stay completly independent from any of the other Divisions
or not impact other Companies for that matter.
If this holds up to the tune of 319 million for one year, the IRS will unleash the hounds on all companies using "contractors".
Nothing may come of it, but, as stated before, stay tuned sports fans.
dabluzman

 

[terryandrene]

>So are you saying the BONUS will be in the mail after all?
>
No bonus

>Now on the serious side, do you really believe what happens
>to Fedex Ground will stay completly independent from any of
>the other Divisions

Yes

 

[antdub33]

If anyone is familiar with the original FedEx vision, FS wanted all aspects of the FedEx umbrella to be conducted as independent contractors. Well his vision has never changed up till now there are still talks of Express turning over to IC's as well. Will that happen? It remains to be seen. Will everything that is taking place with Ground effect any aspects of FedEx that use IC's you bet ya it will and if for one second you think it wont then take your blinders off. Speaking from being in manager meeting with this very topic being discussed in the eyes of the IRS this is a very hot topic and it has just started this has been a fight that the IC's of Ground have been fighting for sometime and will continue to. How will this affect CC? At this point nobody knows but it indeed will!!

 

[Doggie Daddy]

I agree with you antdub,and it's closer than you know.DD.

 

[ATeam]

>>Now on the serious side, do you really believe what happens
>>to Fedex Ground will stay completly independent from any of
>>the other Divisions
>
>Yes

I agree, especially concerning FedEx Custom Critical. The FedEx Ground and FedEx Custom Critical ways of doing business and dealing with contractors greatly differ.

 

[terryandrene]

Call me naive, but I believe there is a very fine line between the IC designation and the employee classification and I further believe that we at FedEx Custom Critical are ever so slightly on the IC side of that line.

Where are the lawyers? From the onset of the Ground litigation, we'd have had hordes of lawyers at our doorsteps urging us to join class action lawsuits nationwide, if any lawfirm even remotely thought we had a reasonable chance of being classified as employees.

Those folks that think the Ground effect will ripple our way must have some belief that we either are employees, or are treated in the same manner as employees. Just what are the issues that have you thinking this way? You signed a lease agreement that states you are an IC. With what provisions of that lease are you not now agreeable?

 

[antdub33]

Actually the only difference between CC and Ground is the way the drivers are dispatched per say. In some instances Ground C's are just like CC being that they are on call so to speak waiting for a run to come up on the unassigned board. Again from being on the inside so to speak many drivers / IC's are floating more in the same boat then what you think. A lot of the drivers go into IC aspect of things because of the word "INDEPENDANT" but when it comes down to the actual contract of things there are many things that are similar. When this hits the CC end of things those who feel that it never will happen to CC will be in for a shock.

 

[greg334]

antdub33
I disagree, there are a lot of differences, one is routing and the other is the way we are told how to work. Ground is pretty much a hook and go situation with a few deviations where we are not told how to load, how to drive and what route we take.

I don't see this affecting Custom Critical at all (outside of the obvious of having FedEx decrease the contractor pool and moving things inside), there are not the numbers to be concerned with in Custom Critical as in Ground - I think we are looking at 15K of trucks in ground (I may be thinking of express).

The thing is for the DoL and the IRS to make a determination for Custom Critical, there will be other things involved that would also have to come into play; proof of holding loads and dispatching purposely around trucks, forcing contractors to do work beyond their contract and punitive damage to a contractor status within Custom Critical over trivial and non-regulatory issues, all of which seemed to have cropped up with ground because of the lawyers who were digging to make their case strong.

I also keep telling people unless you have gone through the process and know something my lawyers and I didn't know, the IRS is not the ones who actually determine status - their concern is with taxes and changing the status recovers the 'lost' tax revenue and nothing else. The DoL is the one who gets involved, most of the time behind the scenes and there are a lot of deviations and gray areas with the regulations when you are talking Labor, even the EEOC policies have to be reviewed and it gets messy.

Most of the contractor issues I have had to deal with was over training, how one is trained and on what. Having to wear a uniform was not a deciding factor because you are contracted to represent a company and maintaining the image and brand of the company is recognized by the courts.

 

[arkjarhead]

One of my cousins is a Ground Contractor. He runs hub to hub, drop and hook. From what he told me the vast majority of their otr guys aren't having a problem with their contracts or FedEx for that matter. He said most really like it, and the only complaint he evers hears out of the otr guys is wish they could get something besides a white truck, but they aren't really that messed up about it. He says it's the local pick up and delivery, house to house guys who have a problem with FedEx Ground. He also said they really don't make any money. He started to get into that side of it, but he found out about the lack of money they make and he already had a white pete he was making payment on so he decided to go otr with them . He's been there for about 5 years I think and he's been very pleased.

 

[davekc]

Gregg is correct on the routing. The court ruling from CA said that Fedex ground can remain IC if they agree to multiple routings.
The ones that refuse, will be bought out of their route.
It is likely that other states will enact a simular deal, but you never know as a lot of suits haven't been heard as of yet.









Davekc
owner
23 years
PantherII
EO moderator

 

[RLENT]

Ark,

You are correct - it is the local P & D guys that have the problem - big time.

My son has around 6 or so Fedex Home Delivery routes - having sold one (thankfully there is a fool born every minute) and now picked up several more (..... hmmm .... what was that I just said about fools ?)

This was inspite of me cautioning him not to acquire any more and to get rid of the ones he has ...... kids .... what can I tell ya ? ..... do they ever listen ?

We originally looked at buying a Home Delivery route ourselves ..... until I got in there and got a really close look at what exactly the situation was - at that point I walked ..... well, no ..... actually I ran .... as fast as I could.

In mine and my sons cases, these routes were promoted in a way that was ..... well, I guess inaccurately would be the polite way to say it .......

My sons continues to live on in hope ..... that things will get better. I'm not anywhere near as optimistic as he is - at least in this regard. After my own experience and watching his in the year or so since, I have to say "the hits just keep on coming ....."

"Peak" season is now essentially over - this is the time when he should have been able to really make some money due to the increased volume. When I talked to him a week or so ago he was pretty dejected and stated that he would basically not make any money this peak (inspite of renting and running "supplemental" vans for his own routes and others besides.) Watch for Fedex's PR statements though .... I'd sure bet the company did (make money.)

After the year ends he and his wife will be reviewing their business and will make a decision on whether to hold or fold ...... the real problem is if he wants to get out he may not be able to ..... route buyers are few and far between .... with Corporate complicating the process and throwing up more barriers to change in ownership than Carter has pills (owning something that you can't sell without someone else's approval is not my idea of independence but hey - that's just me)

.... apparently even Thomas Jefferson had a problem giving up his slaves ..... held onto them until he died as I recall.

I'm about as anti-union as they come - I was raised by parents that owned a business and who by and large treated their employess pretty well ..... but I'd have to say that the best thing that could happen to these poor saps is to have the Teamsters come in and organize them all.

Where's Jimmy H when ya really need him ?

 

[antdub33]

Actually Greg Ground Linehaul aren’t told how to drive what routes to take or anything like that if you have a run takeing you from MD to LA you take the route that is most efficiant unless you have a drop and hook at a certain hub along the way but it was already mentioned that it is the P&D drivers that are dealing with the most issues concerning this problem and in some terminals Linehaul as well but not all and yes there are Linehaul drivers that are hub to hub but there are just as many that are hub to satellite and satellite to satellite or satellite to consignee and that is where the issues of employee are coming in and on top of that you have to remember that all of statutes that are handed down to each company of FedEx are handed down straight from FedEx express and the problem with that is that each branch is handled differently then express such as the IC's of Ground and CC there are very few changes that are made when Express has a policy that is changed or implemented and it is passed down to all other branches there may be different CEOS but everything all stems from FedEx Express and that is where in time the problem will have a trickle down affect. The most important thing is that non of the drama that is going on hurts any of those that are out doing the real work which is helping the company continue to run and run with a good reputation!

 

[greg334]

antdub33

You maybe right for other areas, but I rode along with two ground trucks this past year, maybe thinking I would go over to ground and they were both told what routes to take - it was hub to hub and back. I was also told that if I joined, I would have to take a route first then go hub to hub, the route had 4 or 5 stops on it. There was a reason why but I forgot it.

 

[antdub33]

Oh greg im sure you was told that its sad but Ground could be a good deal if they would just let the IC's be just that but like you said you was told you had to do this and that before you can do somethin else i mean come on thats not a IC and like you said you ran the other way which is why a lot of ppl are doing the same its just not uniform they say it is but it isnt one region will have the little things that they say you have to do first and you can go to another region and they have no idea what your talkin bout.

 

[antdub33]

Linehaul is no doubt the way to go if your going to do it but if your going to be P&D get ready for a lot of crap to deal with from bogus claims to your scanning money wise it depends on your area from the terminal that I was in it was nothing for IC's to have more then one rt and make 80 to 120,000 a year which considering being home everyday really isnt too too bad for a investment of a 50,000 truck. Most put so much down on the truck their payments where veyr small and some even paid out right for the trucks but again depends on the area I think

 

[terryandrene]

Antdub33: Do you have a lease agreement with FedEx Custom Critical? If so, just what are the provisions of your lease or the directives you have received that seems to have you so convinced that the FCC drivers will eventually be designated as employees?

 

[upnygimp]

This legislation isn't so much aimed at the linehaul guys, more at the P&D drivers. It used to be a lot worse, the TM in my terminal was infamous for forcing ICs to paint bumpers and back doors at the slightest sign of wear. He's been reigned in somewhat but he still micromanages more than he should.

But yeah, there's definitely a lot of rumbling and uncertainty going around.

 

[nestor7]

I Have Worked For Both

I have worked for both Custom Critical and Fedex Home Delivery. The difference as I see it is with FHD, is that you have expectations for every work day of the week, five in this case. You go to the same terminal everyday and do the same things. You have little control over how you can run your deliveries, and you cannot refuse to deliver or pick up, if that is what is required. You have packages to deliver everyday. With CC, you never know what might happen as far as getting pick-ups and deliveries. You can refuse loads and you have much more leeway in how you run your business. With FHD, you are tied to a regular schedule, more or less, because you have P & D five days a week, which is certain. With CC, you are more on loan in a sense with no specific schedule to follow. You make yourself available when you want to work.

I just hope I won't have to go back and refile taxes since FHD began in 2000. I hate to hate anything, but with the IRS, they give you little choice sometimes.

Tom