Here we go again, conflicting rulings. The Court of Appeals for the Ninth Circuit, reversing a district court, has held that FedEx drivers in California are employees, not independent contractors, in an action brought by them under the California Labor Code for employment expenses and unpaid wages.
BUT WAIT! The IRS already addressed this issue and determined FedEx drivers were independent contractors. So does this mean that California drivers get a 1099 for federal purposes and a W-2 for California? That would equate a Schedule C on the Federal return and W-2 with 2106 employee business expenses on the California return.
For those of you that prepare returns for FedEx drivers, click here for the details of the case.