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Independent Contractors & Misclassification In The Trucking Industry

During this past summer, FedEx settled a $227 million lawsuit that alleged the company misclassified its delivery drivers as independent contractors. More than 2,000 FedEx workers were paid out because the classification as independent contractors allows FedEx to not offer employee benefits such as sick leave, overtime or mileage. Plaintiffs alleged that in some cases, drivers were forced to pay the wages of their replacements when they were ill and unable to work [1]. Under a “right to control” test that applies in both California and Oregon, the FedEx drivers are clearly employees, not independent contractors– a three-judge appellate panel held. Furthermore, Judge William Fletcher stated in his opinion that, “the drivers must wear FedEx uniforms, drive FedEx-approved vehicles and groom themselves according to FedEx’s appearance standards; FedEx tells its drivers what packages to deliver, on what days, and at what times. Although the drivers may operate multiple delivery routes and hire third parties to help perform their work, they may do so only with FedEx’s consent.” The fact that FedEx called the drivers independent contractors in an operating agreement did not change their actual status as employees, the court said [2].

This decision has impacted the delivery drivers for other services that toe the line of employee or third party contractor. In fact, there is another class-action lawsuit pending in the Los Angeles Superior Court that alleges Amazon working with Scoobeez should fall under the same scrutiny.

Amazon under Fire

The growing list of “independent contractors” who have filed wage-and-hour suits against major companies over claimed misclassification has picked Amazon as their latest target. The plaintiffs are four individuals who have been engaged by Amazon and Scoobeez to provide same day deliveries of consumer goods to customers of the newly launched “Amazon Prime Now” service in the State of California. Plaintiffs were hired by Scoobeez, a courier company operated by ABT holdings, Inc., to work exclusively for Amazon.com, Inc.’s Amazon Prime Now delivery service. The companies schedule the drivers to work regular shifts, pay them by the hour, and assign packages for Plaintiffs to deliver to Amazon Prime Now customers who place orders for one to two hour delivery of all manner of consumer goods using the Amazon Prime Now mobile application. The drivers perform their delivery duties wearing a uniform that identifies them to customers as representative of Amazon Prime Now. Despite these and other clear indications that the drivers are employees, the companies have classified them as “independent contractors”. Due to this, they have denied them the benefits and protections of California employment law [3].

The lawsuit contends that the drivers earn $11 per hour and make deliveries using their own vehicles while paying for gas and other car-related expenses out of pocket. Taree Truong, the lead plaintiff said, “When I was hired, I was told that I would be paid $11 an hour plus tips and $2.50 per delivery; In September, I had to sign a new contract that eliminated the delivery fee. But I never saw an accounting of what tips I received, because everything is paid through an app. I have no way of knowing whether or not I have been paid what I am due.” [4]

In lawsuit, the plaintiffs seek to recover damages on behalf of themselves and similarly situated delivery drivers who have been all jointly employed by the companies. In violation of the California wage and hour law, the companies violate 1 through 10, including the California Labor Code, the California Minimum Wage Order, and the California Industrial Welfare Commission wage orders. The plaintiffs also seek declaratory and injunctive relief based on the companies’ conduct of engaging in unfair and unlawful business practices prohibited by the specific Business and Professions Code [3].

Florida Wage and Hour

Florida’s current minimum wage is $8.05. For overtime and exemption policies, Florida follows the Fair Labor Standards Act (FLSA) drafted by the government that classifies two groups of employees for the purpose of wage and overtime purposes. The two classifications are exempt employees and non-exempt employees. The FLSA minimum wage and overtime requirements apply differently to employees depending on how they are classified. It is also important to note that the FLSA standards may not be the only legal standards that apply to employers and employees regarding minimum wage, overtime and child labor [5].

Based on the lawsuits above, it’s essential for individuals to know exactly was an independent contractor is for the state of Florida. In order for an individual to qualify as an independent contractor and therefore not an employee, they must meet at least four of the following criteria:

  • Maintains a separate business with his or her own work facility, truck, equipment, materials, or similar accommodations;
  • Holds or has applied for a federal employer identification number, unless the independent contractor is a sole proprietor who is not required to obtain a federal employer identification number under state or federal regulations;
  • Receives compensations for services rendered or work performed and such compensation is paid to a business rather than to an individual;
  • Hold open or more bank accounts in the name of the business entity for the purposes of paying business expenses or other expenses related to the services rendered or work performed for compensation;
  • Performs work or is able to perform work for any entity in addition to or besides the employer at his or her own elections without the necessity of completing an employment application or process; or
  • Receives compensation for work or services rendered on a competitive-bid basis or completion of a task or set of tasks as defined by a contractual agreement, unless such contractual agreement expressly states that an employment relationship exits.

However, even if four of the criteria listed above do not exist, an individual may still be presumed to be an independent contractor and not an employee based on full consideration of the nature of the individual situation with regard to satisfying:

  • Performs or agrees to perform specific services or work for a specific amount of money and controls the means of performing the services or work.
  • Incurs the principle expenses related to the service or work that he or she performs or agrees to perform.
  • Is responsible for the satisfactory completion of the work or services that he or she perform or agrees to perform.
  • Receives compensation for the work or services performed for a commission or on a per-job basis and not on any other basis.
  • May realize a profit or suffer a loss in connection with performing work or services.
  • Has continuing or recurring business liabilities or obligations.
  • Success or failure of the independent contractor’s business depends on the relationship of business receipts to expenditures [6].

Sibley Dolman Gipe Accident Injury Lawyers, PA

Do you believe that your employer has failed to pay you minimum wage and/or overtime or that you are a mislabeled employee? Contact an experienced employment law Clearwater attorney. When you contact our office we will immediately set an appointment where you will meet your attorney and be provided with his/her personal contact information.

If your boss is not paying you minimum wage, overtime or requiring you to perform work for periods which you are not being paid, you should immediately call an experienced attorney at Sibley Dolman Gipe Accident Injury Lawyers, PA. We will evaluate your case for free and you will never pay us a dime unless we recover compensation for your injuries. Call (727) 451-6900 today.

Sibley Dolman Gipe Accident Injury Lawyers, PA
800 North Belcher Road
Clearwater, Florida 33765
727-451-6900

https://www.dolmanlaw.com/legal-services/employment-law-attorneys//

References:

[1]http://www.abajournal.com/news/article/fedex_settles_suits_over_misclassification_of_workers_for_227m
[2]http://www.abajournal.com/news/article/seismic_9th_circuit_ruling_calls_fedex_drivers_in_calif._employees_not_inde/
[3] http://big.assets.huffingtonpost.com/amazonprimenow.pdf
[4] http://www.ocregister.com/articles/drivers-689395-amazon-scoobeez.html
[5] http://www.employmentlawhandbook.com/federal-employment-and-labor-laws/flsa/
[6]http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0400-0499/0440/Sections/0440.02.html