Oct 20, 2010 3:49 PM by Irina Cates - Montana's News Station
HELENA - The Montana Attorney General announced the state has reached a $2.3 million settlement with FedEx Ground over its failure to pay unemployment insurance on behalf of its drivers.
Attorney General Steve Bullock says the drivers were misclassified as independent contractors.
The year-long investigation found that drivers had very little control over their own business, were treated as employees and did not meet the qualifications to be independent contractors under Montana law.
The investigation also revealed FedEx Ground owes Montana unemployment taxes, penalties and interest on the drivers' behalf.
Any unemployment insurance coverage already paid by drivers, which should have been paid by FedEx, will be reimbursed directly to drivers.
As a result of the investigation, FedEx will change its business practices in Montana and will engage in good faith negotiations with other states.
This investigation was conducted by the Department of Labor and Industry and the Department of Justice.