Practice Exam Guide for Chapter 1 - Payroll Fundamentals 1 Latest

ractice Exam Guide for Chapter 1 - Payroll Fundamentals 1 Latest Common Law Test - Questions - CORRECT ANSWER-1) How independent is the employee? 2) How much control can be exercised over the worker? Common Law Test - Employee - CORRECT ANSWER-- Required to comply with employer's instructions about when, where, and how to work - Works exclusively for the employer - Hired by the employer - Subject to dismissal; can quit without liability - Has a continuing relationship with the employer - Work done personally - Performs Services unser the company's name - Paid a salary, participates in company's fringe benefits programs - Furnished tools, equipment, materials, and training Common Law Test - Independent Contractor - CORRECT ANSWER-- Sets own hours; determines own sequence of work - Can work for multiple employers; services to the public - Is self-employed - A contract governs how the relationship can be served - Works by the job - Permitted to employ assistants - performs services under the worker's business name - Payment by the job; opportunity for profit and loss Employee Sales - CORRECT ANSWER-Company provides leads, sets terms and conditions of the sale, assigns a territory, and controls the sales process Independent Contractors - Sales - CORRECT ANSWER-Controls the sales process and terms Reasonable Basis Test - CORRECT ANSWER-Exceptions to the common Law Test. Employers can classify certain certain workers as independent contractors for employment tax purposes even though the workers meet the requirement of a common Law Test, if they have a reasonable basis to do so Misclassifying Workers - CORRECT ANSWER-Represents a potential loss of revenue for all levels of government. IRS, DOL, state unemployment agencies can assess severe penalties IRCA (1986) - CORRECT ANSWER-Immigration Reform and Control Act IRCA Employer Sanctions - CORRECT ANSWER-Employers that knowingly hire or continue to employ unauthorized aliens face civil penalties. Could potentially face criminal penalties if the employer has a pattern of violations IRCA - Antidiscrimination - CORRECT ANSWER-Prohibits discrimination in hiring or recruiting workers on basis of national origin or citizenship Verification of Eligibility - CORRECT ANSWER-Burden of verifying that an employee is eligible to work is down to employer. By day 1 of employment, EE fills section one of I-