McDaniel joins FedEx probe | Arkansas Blog

Thursday, March 18, 2010

McDaniel joins FedEx probe

Posted By on Thu, Mar 18, 2010 at 10:48 AM

Attorney General Dustin McDaniel is joining a multistate probe of whether Federal Express incorrectly classifies its drivers as independent contractors rather than employees. This can be a way to sidestep payroll and insurance costs and laws such as the minimum wage.

NEWS RELEASE

LITTLE ROCK -- Attorney General Dustin McDaniel announced today that he has joined a multistate inquiry into how FedEx classifies its delivery drivers.
 
Specifically, the Attorney General is seeking to determine whether FedEx misclassified its drivers as independent contractors rather than as employees.
 
Worker misclassification can cause serious problems for workers, competitors, and the State’s economy. When a company misclassifies an employee as an independent contractor, the company avoids its obligation to pay its share of taxes supporting Social Security, Medicare, workers’ compensation and unemployment insurance.
 
Misclassification also allows the employer to avoid paying minimum wages, overtime, health insurance and other employment-related benefits. It is ultimately the taxpaying citizens who pay for misclassification.
 
“Worker misclassification is a serious issue and has numerous negative consequences. I am committed to addressing this issue with FedEx to ensure our laws are being followed,” McDaniel said.
 
As part of this investigation, McDaniel issued a demand to FedEx requesting information that will allow his office to evaluate whether the company is properly classifying its workers in Arkansas.


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