Attorneys general from Iowa, Kentucky, Missouri, Montana, New Jersey, Ohio, Rhode Island and Vermont sent a letter serving notice to FedEx that they were concerned that the company could be avoiding payroll taxes by classifying its drivers as independent contractors rather than employees. Such an improper classification also would deny workers basic rights such as a minimum wage, workers’ compensation insurance, unemployment insurance, wage and hour protections and civil rights protections.

“FedEx can’t hide from its responsibilities to its workers,” said Ken Hall, Teamsters International Vice President and Director of the Package Division. “Federal and state agencies are taking action to make sure FedEx doesn’t skirt the law and pays its fair share. Thanks to officials like these attorneys general, FedEx and CEO Fred Smith won’t be allowed to profit from this scheme at the expense of its work force and the American taxpayers.”

FedEx Ground is currently the subject of investigations by 30 states to determine if the company is misclassifying workers as independent contractors through its owner-operator model. Also, more than 45 class-action lawsuits have been filed against the company in state and federal courts over its misclassification scheme.

Misclassification of employees not only cheats workers, but leads to the loss of federal income and employment tax revenue. It is estimated that more than $4.7 billion in federal income is lost due to this practice. At the state level, misclassifying 1 percent of workers results in an average of $198 million lost annually to state unemployment insurance funds.

“FedEx has to learn that the laws of this country apply to everyone,” Hall said. “FedEx is going to be held accountable, and the millions of dollars it spends on lobbyists and advertising campaigns won’t change that.”