Every settlement FedEx makes is punitive. Yes they still come out ahead and make big profits from the contractor scam. But $228 million is still a big chunk to come out of their bottom line. And one thing to consider is that this settlement is just for California. It sets a precedent and if other states follow, these settlements are going to get expensive.For those of you thinking this settlement is punitive to FedEx, it's time to play Let's Do The Math!
228 mil, 2300 contractor/employees, 7 years
~$100k/contractor
Costs over 7 years approximate.
New Truck lease - $67,000
2 full sets of tires - $3000
3 Pms/yr - $3000
Fuel - $25,000, wild guess fuel was cheaper then.
Work comp - $50,000
Employer match taxes - $30,000
Total ~$178,000
That assumes no truck repairs and a salary around $45k/yr which is low considering the average hours worked for contractors. I think they'll make that trade any day.
They're already going on all over the country. They just aren't publicized. Every state that has gone ISP has a lot of settlements like this, they wouldn't switch the model otherwise.Every settlement FedEx makes is punitive. Yes they still come out ahead and make big profits from the contractor scam. But $228 million is still a big chunk to come out of their bottom line. And one thing to consider is that this settlement is just for California. It sets a precedent and if other states follow, these settlements are going to get expensive.
Rather be a contractor and it's not even close.That settlement is 4500 people paid $50K per year. I wonder if the end game is they become employees and get settlements for time already served, so in hindsight making them contractors instead of employees cost the company more dollars long term. I'm sure one party is very ok with this and one isn't, you have to ask yourself, which party supports your position better. Would you rather be a contractor or employee?
And how many states are ISP?They're already going on all over the country. They just aren't publicized. Every state that has gone ISP has a lot of settlements like this, they wouldn't switch the model otherwise.
Rather be a contractor and it's not even close.
For those of you thinking this settlement is punitive to FedEx, it's time to play Let's Do The Math!
228 mil, 2300 contractor/employees, 7 years
~$100k/contractor
Costs over 7 years approximate.
New Truck lease - $67,000
2 full sets of tires - $3000
3 Pms/yr - $3000
Fuel - $25,000, wild guess fuel was cheaper then.
Work comp - $50,000
Employer match taxes - $30,000
Total ~$178,000
That assumes no truck repairs and a salary around $45k/yr which is low considering the average hours worked for contractors. I think they'll make that trade any day.
I don't know about other sectors, but in the package game, contractor is the way to go. If I had to summarize, if say freedom and growth potential. At Ground in about 15 years I went from package handler to president of my own company. For the last 5 years I've hardly had to deliver anything. I run some stuff during peak and rarely fill in for a real route. Had I started at brown, I would have spent years as a handler, several more years before I got to top scale and I'd be out working until 7-8pm daily.Why do you prefer being a contractor?
I don't know about other sectors, but in the package game, contractor is the way to go. If I had to summarize, if say freedom and growth potential. At Ground in about 15 years I went from package handler to president of my own company. For the last 5 years I've hardly had to deliver anything. I run some stuff during peak and rarely fill in for a real route. Had I started at brown, I would have spent years as a handler, several more years before I got to top scale and I'd be out working until 7-8pm daily.
It's risky, but if Ground continues its growth, by the time I'm ready to retire my company will be worth several million dollars. The bottom could drop out, but even if it does I'll have gotten to spend a lot of time at home with my family and made a good wage while doing so. You can't get both of those if you're an employee.
I think FedEx settled because they believe in the ISP model and it's legality. I think behind the scenes, FedEx and California hashed out the parameters so Fedex can simply move forward with ISP implementation.One has to wonder why, if it's not a scam as MFE points out but contractors here deny, that FedEx keeps settling these cases out of court? What might happen if FedEx stuck to their guns and fought it in court? And as has happened in the past when they've gotten burnt by their own overreaching, Express employees will most likely take a hit to help pay for this.
I think they settled because they knew eventually they'd lose and the award would be much higher.I think FedEx settled because they believe in the ISP model and it's legality. I think behind the scenes, FedEx and California hashed out the parameters so Fedex can simply move forward with ISP implementation.
Could be. But if they thoughtgoing to ISP in California wouldn't "fix the problem" there would be no reason to settle either.I think they settled because they knew eventually they'd lose and the award would be much higher.
Changing over to ISP would have zero effect on the outcome of this lawsuit. In fact, making such changes the model only gives these lawsuits for past practices more merit.Could be. But if they thoughtgoing to ISP in California wouldn't "fix the problem" there would be no reason to settle either.