 Employee vs. Independent Contractor
Labeling its drivers as independent contractors has proven to be an
effective strategy for FedEx Ground. Lowering its labor costs by
avoiding payroll taxes and benefits gives the company an unfair and
unethical advantage over competitors such as UPS and DHL, who classify
their drivers as employees, many of which have union representation.
An Orlando Sentinel article compared the benefits of a FedEx Ground
driver (a so-called independent contractor) and a union-represented UPS
driver (an employee). Although the jobs are nearly identical, the
comparison reveals how a little label makes a huge difference:
| |
FedEx Ground Driver |
UPS Driver |
| Annual earnings |
Roughly $50,000-60,000, paid per delivery |
$70,000, includes $26.17/hour wage plus overtime |
| Job-related expenses |
Fuel, maintenance, other supplies; cost of route/truck: $30,000 |
None specified |
| Health care |
Driver can opt into plan with some contribution from FedEx Ground |
UPS covers full cost of family-covered health insurance* |
| Retirement |
Driver can opt into plan with some contribution from FedEx Ground |
UPS pays into a defined benefit pension plan* |
| Leave |
Unpaid time off, based on availability of replacement |
4 weeks paid vacation, 1 week paid for personal or sick leave |
| Job security |
FedEx Ground can terminate driver’s contract at any time** |
Union contract mandates UPS demonstrates “just cause” for dismissal* |
Sources:
Wessel, Harry.“Tale of 2 drivers,” Orlando Sentinel, 21 Dec. 2005: G1.
* “National Master United Parcel Service Agreement,” for the period of Aug. 1, 2002 through July 31, 2008.
** Estrada v. FedEx Ground, BC 210130 (CA Super. Ct. 2004).
|
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Four Arab-American drivers from the FedEx Ground terminal in
Wilmington, MA, allege they were the victims of racial, ethnic, and
religious discrimination—and that the company failed to
do anything about it. Read their story.