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Same-day delivery services don't have to give drivers any benefits, court rules
By adamg on Wed, 05/11/2016 - 5:16pm
A federal appeals court says federal law trumps Massachusetts law when it comes to delivery services and that means same-day-delivery companies can keep treating drivers like independent contractors paid based solely on how many packages they deliver, rather than providing them health insurance, worker's compensation and other employee benefits.
The state Attorney General's office, in a case that dates to 2010, had argued that the drivers essentially perform the same functions as employees and so should be compensated the same way, as required under state law.
But an association of same-day delivery companies in Massachusetts argued a federal law related to delivery services prohibits state laws that could interfere with the "prices, routes, or services" of motor carriers.
In its ruling today, the US Court of Appeals for the First Circuit in Boston agreed with the delivery companies that state wages and benefits laws would, under the federal law, illegally tell the companies how to set their prices and run their businesses. Besides, the court said, the companies don't tell their drivers specifically how to run their routes, so the drivers are able to develop their own ways of delivering packages at the lowest possible price.
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Comments
Skeptical...
The companies have no input? No suggested routes? No talking with an employee about how they may improve lackluster delivery?
Misleading headline
Courier companies throughout the country predominantly use independent contractors to provide deliveries for their customers. These independent contractors choose this line of work because of the freedom and flexibility it offers them, and are often relatively well paid for their work.
Massachusetts is the ONLY state in the country that outright bans the use of independent contractors. Before this decision came out, a courier could NEVER be an independent contractor here.
What this decision does is lift the outright ban on independent contractors in MA. The courier company still has to show that the person (a) is free from control by the company, and (b) has an independent business. If these two elements are not met, then the person is an employee and is due benefits. This (or something like it) is the rule in every other state. All this decision does is bring MA back in line with the rest of the country.
Thank you for clarifying.
Thank you for clarifying.
This is incorrect, I dispatch
This is incorrect, I dispatch for a Boston based courier service that has been using IC's for over 30 years. 98% of couriers are ICs in Boston.
Try a variant on the usual terminology
Every time you hear "The law requires employers to provide X," where X is health care, retirement benefits, etc., you should interpret it as follows:
"The law prohibits employers from paying or employees from receiving the employee's entire compensation in cash, and requires instead that some of the compensation be in the form of X instead."
Alternately
...you could read it as "the law requires that the company provide a bare minimum level of compensation, inclusive of benefits, such that the employee will not require state-subsidized healthcare or other benefits, because if you're doing enough business that you need to hire someone to do your work, you should pay them enough that the goddamn government doesn't have to subsidize your cheap ass."
It's like a Rand convention in here this week.
Apples and Oranges
I agree that the company should be required to pay a living wage.
It's the "inclusive of benefits" parts where I disagree.
I don't believe that employers should be required to be in the business of providing housing for their employees, or groceries, or schooling for their children, or clothing, or medical care, or transportation to work, or retirement savings. Except in extremely rare cases where the job requires the employee to live at the work site, or wear a uniform or protective clothing, etc.
I think employers should pay employees a good salary.
I'm guessing that, of the list above, "medical care" and "retirement savings" are our points of disagreement? Or are there more items on that list that you think should be required to be part of a compensation package?
FedEx
Y'all can thank FedEx for this particular bullshit form of exploitation
Could you elaborate, please?
Thanks
"Exploitation"
First, FedEx has gotten away from engaging independent contractors to provide first and last-mile deliveries. Because of litigation, they've gotten out of that game entirely, and now contract out to other companies to provide that service. Which is the exact interference the Court of Appeals was concerned about in its decision.
Second, no one is getting exploited here. If you want to be an employee driver, there are countless such jobs out there. People who sign up to be independent contractor couriers are doing so because they can have their own business, can work for multiple companies, can write off business expenses from their taxes, can choose when and how they want to work, etc.
Some businesses misuse or abuse the independent contractor model, sure. But as I note in my post above, MA law still makes that illegal.
"Independent"
The use of contractors by same day delivery has and always will be a method of avoiding providing benefits and insurance to drivers. Fed Ex got in trouble when they absorbed RPS and create FedEx Ground and tried to make all those drivers contractors. And yes you can choose to be en employee driver and make far less and work more. There is very little freedom in being and independent contractor
And they won
The decision in the above case cites the rationale/precedent from the FedEx case.
they won the battle
This inst over, the same prong test will be fought with Uber drivers etc. The idea that they have no control over the contractors is foolish. So Expressman has no control over when or how the contractors make deliveries? how exactly does Expressman have employees and contractors doing the same job function and one has benefits and insurance and one doesn't? This contractor idea is nothing but a way to avoid paying benefits and insurance costs for the companies. Has been since they started this 25 + years ago and still is today.
If all these people you
If all these people you mention really preferred to be 1099 contractors and not W-2 employees, then this lawsuit would never have been filed, not to mention been appealed.
Lawsuit
The suit was filed by an association on behalf of its delivery company members against the Attorney General, seeking to prevent the AG from enforcing this unconstitutional law against delivery companies. The AG appealed a loss before the District Court.