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FedEx settles driver misclassification lawsuits for US$240 million
US PARCEL delivery giant FedEx has agreed to pay US$240 million to settle lawsuits covering 13,000 drivers in 20 states who claimed they should have been treated as employees instead of independent contractors.
The suits, lodged by drivers of the FedEx Ground division, claimed that as employees, they were owed back pay for overtime, reimbursement for work-related expenses, and other benefits.
Until 2011, FedEx had always contracted directly with independent operators, which allowed the company to save money, reported American Shipper.
The advent of the so-called in demand economy, which includes ride sharing services like Uber and Lyft, has only accelerated the push toward employee classification.
FedEx settled a similar driver misclassification suit in California last June for $228 million.
Then in July, the US Department of Labour issued guidance to employers in determining a workers classification status that primarily revolved around to what extent the company exerts control over a worker's daily activity and freedom to make decisions.
"We are pleased to put this matter behind us as it relates to a contract that has not been in use for a number of years," the company said in its statement.
The suits, lodged by drivers of the FedEx Ground division, claimed that as employees, they were owed back pay for overtime, reimbursement for work-related expenses, and other benefits.
Until 2011, FedEx had always contracted directly with independent operators, which allowed the company to save money, reported American Shipper.
The advent of the so-called in demand economy, which includes ride sharing services like Uber and Lyft, has only accelerated the push toward employee classification.
FedEx settled a similar driver misclassification suit in California last June for $228 million.
Then in July, the US Department of Labour issued guidance to employers in determining a workers classification status that primarily revolved around to what extent the company exerts control over a worker's daily activity and freedom to make decisions.
"We are pleased to put this matter behind us as it relates to a contract that has not been in use for a number of years," the company said in its statement.
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