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In addition to their weekly compensation, contractors receive bonuses for things such as customer service and safety, among other items. From the weekly revenues paid by FedEx, contractors are then required to pay their business expenses, including employee salaries, fuel, insurance, etc.
Though moderating, FedEx Ground contractors experienced 25% inflation in their operations over the last two years, and contractual negotiations over per-mile pay for linehaul operators and pay per stop for P&D (pickup & delivery) haven't kept up.
By classifying the drivers as independent contractors, FedEx has avoided paying legally required benefits like health insurance, worker's compensation, and other fringe benefits. However, a Federal Court has decided that FedEx ground drivers were misclassified as independent contractors in the past.
Yes, they are. Taxes, insurance and retirement are taken out of paychecks.
FedEx Ground route businesses operate as 1099 contractors to FedEx Ground. There are plentiful tax write-offs available to 1099 contractors that you should discuss with your CPA.