Are you working as an independent contractor in New York rather than an employee? If you don’t know this already, it is important that you do: your employer does not have to pay you workers’ compensation benefits if you are injured on the job. This is why some employers use independents instead of hiring employees – they can save money on workers’ comp insurance premiums and they don’t have to deal with the insurance company hassle or expense if an independent is hurt.
New York Attorney General Andrew Cuomo is suing the FedEx Corporation in state court over this very issue. Cuomo’s spokesperson claims that they have tried to negotiate with FedEx for months, but those negotiations broke down – as they have in several other states.
What is the problem? Cuomo alleges that FedEx is doing what many New York employers try to do – classify people who should be employees as independent contractors to save money. They save money because, according to Cuomo, the company does not provide its FedEx Home Delivery drivers the same rights as employees and does not comply with New York state labor laws.
What does this mean to these FedEx workers? Well, since we work with workers’ comp, we’ll focus on that. FedEx is not paying New York workers’ comp insurance, which means two things. First, if a contractor is hurt on the job and unable to work, he or she won’t get help with their medical bills, won’t get an income while they can’t work, and won’t get any help with returning to work. Some workers don’t consider this until they get hurt and suddenly find themselves unable to support their families or make ends meet.
Second, it means that FedEx can use the money they save to compete against other home delivery services. One business professor estimates that by classifying so many workers as independent contractors, FedEx ends up with a cost advantage over UPS of about 30 percent.
Is this ethical? The New York Attorney General clearly does not think this is the case. Workers have rights, and when a company controls all aspects of a worker’s job the way FedEx does – telling them what hours they have to work, what job duties they have, what routes they must take, and what clothing they must wear – they are treating contractors like employees.
Do you have questions about NY workers’ comp insurance? We can help.
At Markhoff & Mittman, we care about New York workers. We’ve dedicated our practice to helping injured NY workers get the compensation they deserve after a workplace accident. Not sure if you need a lawyer or if you deserve NY workers’ comp benefits? Call us – you have nothing to lose.