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<blockquote data-quote="dmac1" data-source="post: 2454411" data-attributes="member: 60252"><p>Under the old OA, there was no doubt that if you drove one route yourself, it made you an employee of fedex. That made people you hired to drive for fedex employees of fedex. With fedex as the only entity you 'contract' with, and the only company 'your' drivers deliver for,under the new model, you are a co-employer just like a McDonalds franchise owner is a co-employer with McDonalds of those who work in the franchisee's location by law even if the contract says otherwise. </p><p></p><p>Fedex will be finding this out when a fedex contactor hires a driver who proceeds to kill a school busload of children and try to claim that they have no liability for millions and millions of dollars. </p><p></p><p>Until then, as long as fedex ensures that the contractor pays employment taxes and at least minimum necessary insurance- liability- WC, and UI- they won't need to worry as long as they treat the contractors decently and fairly. And fedex can afford a few hundred million every couple years to pay off uncovered liability claims for 'contractor' liability that insurance doesn't cover. </p><p></p><p>Unless the IRS gets involved to get more tax revenue from fedex, fedex is pretty safe with the new model. Currently, contractors pay a lot less in FICA taxes than would be collected if taxes were paid on them like they were employees, even if contractors still paid all their own work expenses- like fuel, insurance, uniforms, etc. As a contractor, those expenses are deducted before FICA taxes are paid, but if contractors were classified as employees, contractors would be paying FICA taxes on gross pay from fedex instead of net income.</p></blockquote><p></p>
[QUOTE="dmac1, post: 2454411, member: 60252"] Under the old OA, there was no doubt that if you drove one route yourself, it made you an employee of fedex. That made people you hired to drive for fedex employees of fedex. With fedex as the only entity you 'contract' with, and the only company 'your' drivers deliver for,under the new model, you are a co-employer just like a McDonalds franchise owner is a co-employer with McDonalds of those who work in the franchisee's location by law even if the contract says otherwise. Fedex will be finding this out when a fedex contactor hires a driver who proceeds to kill a school busload of children and try to claim that they have no liability for millions and millions of dollars. Until then, as long as fedex ensures that the contractor pays employment taxes and at least minimum necessary insurance- liability- WC, and UI- they won't need to worry as long as they treat the contractors decently and fairly. And fedex can afford a few hundred million every couple years to pay off uncovered liability claims for 'contractor' liability that insurance doesn't cover. Unless the IRS gets involved to get more tax revenue from fedex, fedex is pretty safe with the new model. Currently, contractors pay a lot less in FICA taxes than would be collected if taxes were paid on them like they were employees, even if contractors still paid all their own work expenses- like fuel, insurance, uniforms, etc. As a contractor, those expenses are deducted before FICA taxes are paid, but if contractors were classified as employees, contractors would be paying FICA taxes on gross pay from fedex instead of net income. [/QUOTE]
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