Are FedEx Contractors Required to Provide Benefits to Employees?

When you own a FedEx route, you are in charge of the operational activities of your business. This includes everything from hiring and training to maintaining delivery vehicles.

Naturally, you may wonder if contractors need to offer employee benefits to drivers. It’s one of the most common FedEx buyer questions that sellers receive.

As a small business owner, it is up to your discretion whether you offer benefits to your employees. These benefits may include:

  • Health benefits (medical, vision, and dental)
  • Retirement benefits (such as 401k)
  • Paid time off (paid annual leave, maternity or paternity leave, holidays)
  • Bonuses, awards, or incentives


Although employee benefits are not mandatory, they are becoming increasingly common.

As the owner of a FedEx route, the management of the operation and employees is done at your discretion. While contractors are not required by FedEx to provide benefits for drivers, they do play an important role when it comes to keeping your team happy and motivated to continue working for you.

Without benefits, drivers are more likely to seek other positions or feel unmotivated. This can harm employee morale and productivity—and ultimately, the success of your business.

Across the board, last-mile trucking positions have always been prone to employee turnover, largely due to the fact that benefits are often not offered. Unfortunately, FedEx is no exception and this component of driver turnover is considered to be a disadvantage of owning a FedEx route.

Don’t let this challenge deter you from becoming a route owner, though. You can keep your FedEx drivers (and reduce turnover) by providing employee benefits. Not only will this attract and retain FedEx drivers, but the individuals on your team will have more of a reason to work hard and help your business thrive.


Ready to become a FedEx Contractor? Contact KR Capital

If you have more questions about owning a FedEx route, we invite you to contact KR Capital. Our experienced team of brokers can help you find FedEx routes for sale and guide you through the FedEx approval process. Contact us at (503) 664-0753 or complete our online form today.