Ch01
Student: ___________________________________________________________________________
1. Regulations governing the employer-employee relationship are based on agency law and failure of
an employee/agent to act according to the employer's instructions could result in liability for the
employer.
True False
2. Misclassification of employees as independent contractors can result in liability under the Fair Labor
Standards Act of 1938.
True False
3. If an agent acts without authority of the principal, the principal is not liable for any resulting loss to a
third party.
True False
4. There is one commonly accepted definition of "employee" used by courts.
True False
5. An employer is vicariously liable for the actions of an employee causing harm to a third party outside the
course of employment.
True False
6. Under the economic realities test, courts consider whether the worker is economically dependent on a
particular enterprise or works for himself or herself.
True False
7. A signed agreement between a company and a worker that specifically states that no employee-employer
relationship exists will be controlling in the event of a legal dispute over whether the worker is covered
by the National Labor Relations Act.
True False
8. Marco provides accounting services to the Consolidated Bank as an independent contractor. Marco must
pay his own Social Security (FICA), FICA excise, and federal unemployment compensation (FUTA),
taxes. However, Consolidated is responsible for federal and state income tax withholdings.
True False
9. Willful violations of FLSA subject an employer to criminal liability.
True False
10. If an employer does not make any withholding from a worker's pay for taxes, then the IRS deems the
worker to be an independent contractor.
True False
11. The Wonder City Restaurant uses a staffing firm to obtain temporary workers. After the staffing firm
sent over a temporary hostess, Wonder asked the firm to replace her with someone of another race. If
the hostess who was replaced proceeds with a Title VII claim, Wonder cannot be liable because the
temporary hostess was never its employee.
True False
12. Non-compete agreements are governed by federal law.
True False
13. The Civil Rights Act of 1866 applies to employers with 15 or more employees.
True False
,14. The Rehabilitation Act applies to federal contractors with contracts with the federal government in excess
of $10,000 annually.
True False
15. ABC, Inc. solicited bids from various independent contractors to landscape the grounds of its new office
complex. Drew, head of facilities management told Patty, his secretary, that he would not accept any bids
from Hispanic contractors. Drew explained that he would authorize hiring only American contractors to
work on the grounds. A Hispanic contractor brings a lawsuit against ABC for discrimination.
A. Drew's refusal to hire Hispanic companies is a violation of the Independent Contractors Act of 2006.
B. Drew's refusal to hire Hispanic companies is a violation of Title VII of the Civil Rights Act.
C The Hispanic contractor cannot prevail in a discrimination case because Drew's conversation with his
. secretary is confidential and cannot be used as evidence.
DDrew's refusal to hire Hispanic companies is not a violation of Title VII of the Civil Rights Act because
. that law does not cover discrimination against independent contractors.
16. Ling frequently stocks shelves for Ace's Market on an as needed basis. Ace pays Ling $5 per shelf. One
day Ling falls off a broken ladder while stocking a shelf. Ling is seriously injured:
A. If Ling is determined to be an independent contractor, he is eligible for workers' compensation.
B. If Ling is determined to be an employee, he is eligible for workers' compensation.
C. Ling is eligible for workers' compensation whether he is an employee or an independent contractor.
D. None of the above.
17. The three main tests courts use to classify employees and independent contracts are:
A. Master-servant rule, Darden test, and economic realities test.
B. Master-servant rule, IRS 20-factor analysis, and hybrid analysis.
C. Common-law agency test, IRS 20-factor analysis, and economic realities test.
D. Common-law agency test, FedEx test, and hybrid analysis.
18. The IRS 20-factor analysis includes a consideration of:
A. whether the worker is economically dependent on the employer
B. whether the employer is engaged in interstate commerce
C. whether the employer provides training of the worker
D. All of the above.
19. Which factor is not part of the economic realities test used by the courts to determine whether a worker is
an employee or an independent contractor?
A. the degree of control exerted by the alleged employer over the worker.
B. how integral the work is to the alleged employer's business.
C. the degree of skill required by the worker.
D. whether the alleged employer withholds payroll taxes or provides worker's compensation.
20. Which of the following is not covered by the EEOC's definition of contingent worker?
A. an employee hired through a staffing firm.
B. a temporary, seasonal, or part-time worker.
C. an applicant.
D. an independent contractor.
21. Title VII of the Civil Rights Act
A. applies to all employers.
B applies to all employers engaged in commerce with 15 or more employees for each working day for 20
. or more weeks in the current or preceding year.
C. applies to Indian tribes and government-owned corporations.
D. none of the choices are correct.
,22. The Americans with Disabilities Act
A applies to all employers with 15 or more workers, excluding state and local government employers,
. employment agencies, and labor unions.
B applies to all employers with 15 or more workers, including state and local government employers,
. employment agencies and labor unions.
C. applies to fully owned U.S. corporations, Indian tribes, and bona fide private membership clubs.
D. B and C only.
23. Employment law based on agency principles imposes a duty on the employee to act as authorized. If the
employee exceeds his/her authority, the employer
A. is not liable for any loss or damage that results from the employee's unauthorized conduct.
B. is liable for damages or losses incurred by third parties and the employer has no recourse against the
employee.
C. is liable for damages or losses incurred by third parties and the employer is entitled to be reimbursed
by the employee.
D. None of the choices are correct.
24. Benita works as a nursing assistant in a retirement home run by Cottonwood Care Centers, a national
operator of facilities providing care for the elderly. Benita works 53 hours a week. After looking at her
payroll stubs for the past 6 months, she concludes that she has not received sufficient overtime pay. She
complains to her supervisor but the company takes no action.
A. Benita can bring a complaint to the National Labor Relations Board under the Fair Labor Standards
Act of 1938 (FLSA).
B. Benita can bring a complaint to the U.S. Department of Labor, under the Fair Labor Standards Act of
1938 (FLSA).
C Benita can bring a complaint to the U.S. Department of Labor, under the Employee Retirement Income
. Security Act of 1974 (ERISA).
D. Benita can bring a complaint to the U.S. Department of Labor, under Executive Order 11246.
25. Tobin is an independent contractor for Wagoneer, Inc. While driving to a meeting at Wagoneer's
headquarters, Tobin is texting his supervisor at Wagoneer. As a result of his inattentive driving, he causes
a car accident. In reference to Wagoneer's liability for the accident:
A. Wagoneer has product liability.
B. Wagoneer has vicarious liability.
C. Wagoneer has strict liability.
D. Wagoneer has no liability.
26. Sofia is an employee for Ambrose's Landscaping. While showing a customer how to use a hedge clipper,
she inadvertently cuts the customer on the arm, requiring a hospital trip and several stitches. Regarding
Ambrose's liability for the incident
A. Ambrose is not vicariously liable because it was an accident.
B. Ambrose is vicariously liable because Sofia was not acting within the course of employment.
C. Ambrose is not vicariously liable because Sofia was not acting within the course of employment.
D. Ambrose is vicariously liable because Sofia was acting within the course of employment.
, 27. BRC Partners is a consulting firm. Sam and Arnie are analysts for BRC. Sam was hired as an employee
and Arnie was hired as an independent contractor. They both work in the same BRC office under the
same supervisor. They both must work Monday through Friday during standard business hours. Both
are required to report to weekly staff meetings. Sam is paid a salary and the proper federal and state tax
witholdings are made. Arnie does not receive benefits like retirement and health insurance and he is paid
by the project with no federal and state withholdings. Arnie signed a contract that clearly stated he was an
independent contractor and not an employee.
A. BRC has properly classified Arnie as an independent contractor.
B. BRC has improperly classified Arnie as an independent contractor.
CBRC has improperly classified Arnie as an independent contractor, however, its contract with Arnie is
. binding and BRC will have no liability under federal or state law for the misclassification.
DBRC has improperly classified Arnie as an independent contractor, however, its contract with Arnie is
. binding and BRC will have no liability under federal and state law for the misclassification, but Arnie
will have liability under federal and state law.
28. The First Family Painting Company employs 2 supervisors, 7 painters, 4 helpers, 1 scheduler, 1
carpenter, and 1 office manager. The company's owner wants to know whether her employees are
covered by the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964 and the Age
Discrimination in Employment Act of 1967.
A. All three laws apply to the employees because the company has at least 15 employees.
B. None of the laws apply to the employees because supervisors don't count as employees for the purpose
of applying these laws.
C. The employees are covered by Title VII of the Civil Rights Act of 1964 only.
D. The employees are covered by Title VII of the Civil Rights Act of 1964 and the Americans with
Disabilities Act.
29. The law firm of Shirk, Work & Fish hired a staffing firm to place a temporary receptionist in their
office. The receptionist was on the payroll of the staffing firm. The law firm's office manager trained the
receptionist to handle phone calls and visitors in accordance with the firm's policies, gave him deadlines
for work assignments and decided when the receptionist could take breaks and go to lunch. After working
with Shirk for 13 months, the receptionist made an allegation of race discrimination because he applied
for a paralegal job that the staffing firm filled at the law firm and the office manager did not select
him.
A. The receptionist cannot bring a case against the law firm because he is an employee of the staffing
firm.
BThe law firm and the staffing firm may be considered joint employers of the receptionist for purpose of
. the discrimination claim because it controls when, where, and how he performs his job, the length time
the receptionist worked at the law firm, and their combined roles in filling the paralegal position.
CThe receptionist cannot bring a case against the staffing firm because it only pays him, has no other
. control over his work and it did not make the selection for the paralegal job.
D. The receptionist cannot bring a case against the law firm because he is a temporary employee.
30. An applicant exists when
I. the employer has acted to fill a particular position.
II. the individual has followed the employer's standard procedures for submitting applications.
III. the individual has indicated an interest in the particular position.
A. I and II.
B. II and III.
C. I and III.
D. I, II, and III.
31. Abdul is looking for new employment. Under the Uniform Guidelines on Employee Selection
Procedures, Abdul is considered an applicant
A. when he sends an email inquiry about a job announcement
B. when he posts his resume on a third party job board
C. A and B
D. Neither A nor B
Student: ___________________________________________________________________________
1. Regulations governing the employer-employee relationship are based on agency law and failure of
an employee/agent to act according to the employer's instructions could result in liability for the
employer.
True False
2. Misclassification of employees as independent contractors can result in liability under the Fair Labor
Standards Act of 1938.
True False
3. If an agent acts without authority of the principal, the principal is not liable for any resulting loss to a
third party.
True False
4. There is one commonly accepted definition of "employee" used by courts.
True False
5. An employer is vicariously liable for the actions of an employee causing harm to a third party outside the
course of employment.
True False
6. Under the economic realities test, courts consider whether the worker is economically dependent on a
particular enterprise or works for himself or herself.
True False
7. A signed agreement between a company and a worker that specifically states that no employee-employer
relationship exists will be controlling in the event of a legal dispute over whether the worker is covered
by the National Labor Relations Act.
True False
8. Marco provides accounting services to the Consolidated Bank as an independent contractor. Marco must
pay his own Social Security (FICA), FICA excise, and federal unemployment compensation (FUTA),
taxes. However, Consolidated is responsible for federal and state income tax withholdings.
True False
9. Willful violations of FLSA subject an employer to criminal liability.
True False
10. If an employer does not make any withholding from a worker's pay for taxes, then the IRS deems the
worker to be an independent contractor.
True False
11. The Wonder City Restaurant uses a staffing firm to obtain temporary workers. After the staffing firm
sent over a temporary hostess, Wonder asked the firm to replace her with someone of another race. If
the hostess who was replaced proceeds with a Title VII claim, Wonder cannot be liable because the
temporary hostess was never its employee.
True False
12. Non-compete agreements are governed by federal law.
True False
13. The Civil Rights Act of 1866 applies to employers with 15 or more employees.
True False
,14. The Rehabilitation Act applies to federal contractors with contracts with the federal government in excess
of $10,000 annually.
True False
15. ABC, Inc. solicited bids from various independent contractors to landscape the grounds of its new office
complex. Drew, head of facilities management told Patty, his secretary, that he would not accept any bids
from Hispanic contractors. Drew explained that he would authorize hiring only American contractors to
work on the grounds. A Hispanic contractor brings a lawsuit against ABC for discrimination.
A. Drew's refusal to hire Hispanic companies is a violation of the Independent Contractors Act of 2006.
B. Drew's refusal to hire Hispanic companies is a violation of Title VII of the Civil Rights Act.
C The Hispanic contractor cannot prevail in a discrimination case because Drew's conversation with his
. secretary is confidential and cannot be used as evidence.
DDrew's refusal to hire Hispanic companies is not a violation of Title VII of the Civil Rights Act because
. that law does not cover discrimination against independent contractors.
16. Ling frequently stocks shelves for Ace's Market on an as needed basis. Ace pays Ling $5 per shelf. One
day Ling falls off a broken ladder while stocking a shelf. Ling is seriously injured:
A. If Ling is determined to be an independent contractor, he is eligible for workers' compensation.
B. If Ling is determined to be an employee, he is eligible for workers' compensation.
C. Ling is eligible for workers' compensation whether he is an employee or an independent contractor.
D. None of the above.
17. The three main tests courts use to classify employees and independent contracts are:
A. Master-servant rule, Darden test, and economic realities test.
B. Master-servant rule, IRS 20-factor analysis, and hybrid analysis.
C. Common-law agency test, IRS 20-factor analysis, and economic realities test.
D. Common-law agency test, FedEx test, and hybrid analysis.
18. The IRS 20-factor analysis includes a consideration of:
A. whether the worker is economically dependent on the employer
B. whether the employer is engaged in interstate commerce
C. whether the employer provides training of the worker
D. All of the above.
19. Which factor is not part of the economic realities test used by the courts to determine whether a worker is
an employee or an independent contractor?
A. the degree of control exerted by the alleged employer over the worker.
B. how integral the work is to the alleged employer's business.
C. the degree of skill required by the worker.
D. whether the alleged employer withholds payroll taxes or provides worker's compensation.
20. Which of the following is not covered by the EEOC's definition of contingent worker?
A. an employee hired through a staffing firm.
B. a temporary, seasonal, or part-time worker.
C. an applicant.
D. an independent contractor.
21. Title VII of the Civil Rights Act
A. applies to all employers.
B applies to all employers engaged in commerce with 15 or more employees for each working day for 20
. or more weeks in the current or preceding year.
C. applies to Indian tribes and government-owned corporations.
D. none of the choices are correct.
,22. The Americans with Disabilities Act
A applies to all employers with 15 or more workers, excluding state and local government employers,
. employment agencies, and labor unions.
B applies to all employers with 15 or more workers, including state and local government employers,
. employment agencies and labor unions.
C. applies to fully owned U.S. corporations, Indian tribes, and bona fide private membership clubs.
D. B and C only.
23. Employment law based on agency principles imposes a duty on the employee to act as authorized. If the
employee exceeds his/her authority, the employer
A. is not liable for any loss or damage that results from the employee's unauthorized conduct.
B. is liable for damages or losses incurred by third parties and the employer has no recourse against the
employee.
C. is liable for damages or losses incurred by third parties and the employer is entitled to be reimbursed
by the employee.
D. None of the choices are correct.
24. Benita works as a nursing assistant in a retirement home run by Cottonwood Care Centers, a national
operator of facilities providing care for the elderly. Benita works 53 hours a week. After looking at her
payroll stubs for the past 6 months, she concludes that she has not received sufficient overtime pay. She
complains to her supervisor but the company takes no action.
A. Benita can bring a complaint to the National Labor Relations Board under the Fair Labor Standards
Act of 1938 (FLSA).
B. Benita can bring a complaint to the U.S. Department of Labor, under the Fair Labor Standards Act of
1938 (FLSA).
C Benita can bring a complaint to the U.S. Department of Labor, under the Employee Retirement Income
. Security Act of 1974 (ERISA).
D. Benita can bring a complaint to the U.S. Department of Labor, under Executive Order 11246.
25. Tobin is an independent contractor for Wagoneer, Inc. While driving to a meeting at Wagoneer's
headquarters, Tobin is texting his supervisor at Wagoneer. As a result of his inattentive driving, he causes
a car accident. In reference to Wagoneer's liability for the accident:
A. Wagoneer has product liability.
B. Wagoneer has vicarious liability.
C. Wagoneer has strict liability.
D. Wagoneer has no liability.
26. Sofia is an employee for Ambrose's Landscaping. While showing a customer how to use a hedge clipper,
she inadvertently cuts the customer on the arm, requiring a hospital trip and several stitches. Regarding
Ambrose's liability for the incident
A. Ambrose is not vicariously liable because it was an accident.
B. Ambrose is vicariously liable because Sofia was not acting within the course of employment.
C. Ambrose is not vicariously liable because Sofia was not acting within the course of employment.
D. Ambrose is vicariously liable because Sofia was acting within the course of employment.
, 27. BRC Partners is a consulting firm. Sam and Arnie are analysts for BRC. Sam was hired as an employee
and Arnie was hired as an independent contractor. They both work in the same BRC office under the
same supervisor. They both must work Monday through Friday during standard business hours. Both
are required to report to weekly staff meetings. Sam is paid a salary and the proper federal and state tax
witholdings are made. Arnie does not receive benefits like retirement and health insurance and he is paid
by the project with no federal and state withholdings. Arnie signed a contract that clearly stated he was an
independent contractor and not an employee.
A. BRC has properly classified Arnie as an independent contractor.
B. BRC has improperly classified Arnie as an independent contractor.
CBRC has improperly classified Arnie as an independent contractor, however, its contract with Arnie is
. binding and BRC will have no liability under federal or state law for the misclassification.
DBRC has improperly classified Arnie as an independent contractor, however, its contract with Arnie is
. binding and BRC will have no liability under federal and state law for the misclassification, but Arnie
will have liability under federal and state law.
28. The First Family Painting Company employs 2 supervisors, 7 painters, 4 helpers, 1 scheduler, 1
carpenter, and 1 office manager. The company's owner wants to know whether her employees are
covered by the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964 and the Age
Discrimination in Employment Act of 1967.
A. All three laws apply to the employees because the company has at least 15 employees.
B. None of the laws apply to the employees because supervisors don't count as employees for the purpose
of applying these laws.
C. The employees are covered by Title VII of the Civil Rights Act of 1964 only.
D. The employees are covered by Title VII of the Civil Rights Act of 1964 and the Americans with
Disabilities Act.
29. The law firm of Shirk, Work & Fish hired a staffing firm to place a temporary receptionist in their
office. The receptionist was on the payroll of the staffing firm. The law firm's office manager trained the
receptionist to handle phone calls and visitors in accordance with the firm's policies, gave him deadlines
for work assignments and decided when the receptionist could take breaks and go to lunch. After working
with Shirk for 13 months, the receptionist made an allegation of race discrimination because he applied
for a paralegal job that the staffing firm filled at the law firm and the office manager did not select
him.
A. The receptionist cannot bring a case against the law firm because he is an employee of the staffing
firm.
BThe law firm and the staffing firm may be considered joint employers of the receptionist for purpose of
. the discrimination claim because it controls when, where, and how he performs his job, the length time
the receptionist worked at the law firm, and their combined roles in filling the paralegal position.
CThe receptionist cannot bring a case against the staffing firm because it only pays him, has no other
. control over his work and it did not make the selection for the paralegal job.
D. The receptionist cannot bring a case against the law firm because he is a temporary employee.
30. An applicant exists when
I. the employer has acted to fill a particular position.
II. the individual has followed the employer's standard procedures for submitting applications.
III. the individual has indicated an interest in the particular position.
A. I and II.
B. II and III.
C. I and III.
D. I, II, and III.
31. Abdul is looking for new employment. Under the Uniform Guidelines on Employee Selection
Procedures, Abdul is considered an applicant
A. when he sends an email inquiry about a job announcement
B. when he posts his resume on a third party job board
C. A and B
D. Neither A nor B
