IRS Playing Santa to the FedEx Drivers

Here’s the situation – FedEx, like many companies, likes to hire drivers on a temporary, part-time basis as independent contractors. Having workers under this status saves companies money in lots of ways such as vehicle maintenance, overtimes and in taxes. And when companies save money the stockholders are happy. Win-win, right?

Wrong, says the drivers. The workers’ voices are being drowned out in all the money-saving joy. When workers cost less that means that they receive less. All that money saved in denied benefits, vehicle maintenance and taxes has to be made up somewhere and that place is usually out of the workers’ pockets.

And when it comes to taxes you know that the IRS wants to get involved. Last week the IRS ordered FedEx to pay regular employee taxes for these workers that it had previously labeled as independent contractors. The back taxes and fines total $319 million for 2004 through 2006. Further investigation may result in more. FedEx promises to appeal the decision.