UPS Pays 12.5 Million to Settle Overtime Suit
“What can brown do you you?” A group of 660 big brown delivery drivers
are ready to tell the company what it can do for them – it can pay them 12.5M. UPS just agreed to settle an overtime class action brought by delivery drivers who were misclassified as independent contracts.
The drivers claim they were deprived of benefits that regular employees receive because they misclassified as independent contractors.
The settlement was reported by law.com last week. According to the article, the parties settled after a multi day mediation with JAMS mediator Ronald Sabraw.
Companies can save money by classifying workers as independent contractors because contractors typically do not get benefits such as health insurance. Independent contractors are not entitled to overtime either.
Certain strict requirements need to be satisfied in order for workers to be properly classified as independent contractors and companies often misclassify to reduce costs. But the reality is that companies usually do not get caught misclassifying employees so it usually pays off, unless they get sued. Here, UPS got caught.
