Massachusetts’ attorney general says FedEx Ground has agreed to pay the state $3 million in a dispute over alleged misclassification of drivers as independent contractors.
The state says the package delivery company’s actions denied the state payroll taxes as well as worker compensation and unemployment assistance contributions.
Attorney General Martha Coakley’s office said the company also gained an unfair competitive advantage.
The money will go to the state’s general fund, as well as to 13 drivers named in the settlement.
The agreement, disclosed yesterday, does not affect a lawsuit against the company by drivers.
FedEx Ground, a subsidiary of Memphis-based FedEx Corp., denies liability in the settlement. A spokesman said the company reached the agreement to resolve the claims so it can focus on providing service to customers.