Payroll Independent Contractor For Fedex
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FAQ
FedEx Ground refers to the independent businesses that it contracts with for transportation services as ?service providers.? These businesses are organized legally as corporations. They employ their own personnel, including drivers. They provide their own vehicles that they operate and maintain.
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.
It used independent contractors as a lower-cost, flexible workforce, which FedEx found attractive. Primarily an airline, FedEx wanted to get into the ground business, so it acquired RPS in 1998. By 2004, it had 16,200 owner-operators, who each took on a route and all the responsibilities of running their own business.
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.
All these factors in mind, the average annual profit for a FedEx route has been reported at between $30,000 ? $40,000. While it might not seem like your on your way to becoming a millionaire, the best part about owning a FedEx route is that you don't have to own just one!