IRS fines FedEx $319 million for
independent contractor dodge
Unions for Kids poker run gets a kick start
Lee Duncan (left) of IBEW Local 48 receives a check for $5,000 from Mark
Kenney, service manager of McKinstry Co. , for the sixth annual Unions for
Kids Motorcycle Poker Run scheduled for June 14. McKinstry, a unionized
mechanical contractor with offices in Portland and Seattle, and the Pacific
Northwest Regional Council of Carpenters, are the first-ever title sponsors for
the fund-raising event for Doernbecher Children’s Hospital. In addition to
registration fees for the poker run, money is raised through a raffle for a new
Harley-Davidson. Tickets are now on sale at $10 each for a chance to win a
2008 Dyna Low Rider FXDL 105th anniversary limited edition bike. Only
3,500 tickets will be sold. The organization also is challenging unions and
contractors to help with a $1,000 Club sponsorship. Unions for Kids is a non-
profit organization comprised of members of unions and union contractors
in the area. The group has raised $71,000 for Doernbecher in just five years.
For more information, call Duncan at 503-260-5905.
Unions help Share program
VANCOUVER — Several labor
unions are helping Share, a non-profit
organization that provides shelter, food
and emergency services for people in
Southwest Washington, through spon-
sorships at its fundraising events.
Share is holding a Mardi Gras Gala
— the first of its four major fundraisers
— Saturday, Feb. 2, from 5 to 11 p.m. at
the Vancouver Hilton Hotel. The gala
includes wine and hors d’oeuvres, a
New Orleans-style dinner, casino-style
gambling and silent and live auctions.
IBEW Local 48 and EC Electric are
sponsoring the silent auction, and La-
borers Local 296 is sponsoring a gam-
ing table. Tickets are $75.
On April 28, a “Share-A-Bowl” din-
ner fundraiser will feature saxophonist
Patrick Lamb, who is a member of Mu-
sicians Local 99. IBEW Local 48’s
Washington Political Action Committee
is helping sponsor the event.
For information on sponsoring a
Share event, call Pam at 360-695-7658
ext. 309.
WASHINGTON, D.C. (PAI) —
An employer’s continued efforts to
misclassify workers as “independent
contractors” and avoid paying Social
Security taxes, Medicare, workers’
compensation insurance and other
benefits just got a $319 million kick
in the head.
That’s how much the Internal Rev-
enue Service fined FedEx in late De-
cember for misclassifying 15,000 of
its FedEx Ground pickup and delivery
drivers as “independent contractors.”
FedEx said it will appeal.
Besides the FedEx workers, other
independent contractors who really
aren’t independent abound in the con-
struction industry and among some
service industries, such as advertising
sales and messengers.
Teamsters President Jim Hoffa
hailed the IRS ruling against
“FedEx’s illegal independent contrac-
tor scam.”
The day before the IRS ruling, the
Massachusetts attorney general also
ruled that FedEx Ground illegally
misclassified its drivers.
“It’s ‘game over’ ” for FedEx,
Hoffa said.
The IRS found the problem of
misclassified independent contractors
is so pervasive that it created new
Form 8919 for workers misclassified
by their companies. The form, “Un-
collected Social Security and
Medicare Tax on Wages,” will now be
used to figure and report the em-
ployee’s share of uncollected Social
Security and Medicare taxes due on
their compensation,” the agency ex-
plained on Dec. 20 — the day of its
FedEx ruling. IRS did not say what it
would do about the employer’s share
of those levies.
“Generally, a worker who receives
a Form 1099 for services provided as
an independent contractor must report
the income on Schedule C and pay
self-employment tax on the net
profit,” IRS explained. “However,
sometimes the worker is incorrectly
treated as an independent contractor
when they are actually an employee.
When this happens, Form 8919 will
be used beginning for tax year 2007
by workers who performed services
for an employer but the employer did
not withhold the worker’s share of
Social Security and Medicare taxes,”
the agency added.
Workers who have to file the form
are those who receive letters from the
IRS saying they’re really employees
and not independent contractors.
American Federation of Teachers, Oregon
Electrical Association endorse Merkley
The Oregon State Association of
Electrical Workers and the American
Federation of Teachers-Oregon have
endorsed State Rep. Jeff Merkley in
the Democratic primary for U.S. Sen-
ate.
The Association of Electrical
Workers and its affiliate local unions
represent workers in inside electrical
construction, telecommunications,
broad- casting, electrical manufactur-
ing and maintenance. “Jeff has been a
champion for Oregon workers for
nearly a decade in the Legislature,”
said IBEW Local 48 Business Man-
ager Clif Davis. “He comes from a
union family, so he understands the
values of fair treatment and hard
work.”
AFT-Oregon encompasses 20 lo-
cals representing some 10,000 work-
ers in K-12, community college and
higher education in faculty and classi-
fied positions; and child care workers
in both public and private sectors.
“Jeff has stood with us for better
health care in Oregon, a more stable
economy, and his critical role in di-
recting the largest increase in higher
education funding in Oregon in mem-
ory,” said AFT-Oregon President
Mark Schwebke.
Seven labor groups, including the
Oregon AFL-CIO, have endorsed
Merkley. The winner of the May pri-
mary will challenge Republican in-
cumbent Gordon Smith.
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JANUARY 18, 2008
NORTHWEST LABOR PRESS
PAGE 7