Deck 1: The Regulation of Employment

Question 1

Willful violations of FLSA subject an employer to criminal liability.

Answer 1

True

Question 2

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.

Answer 2

B

Question 3

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.

Answer 3

C

Question 4

Misclassification of employees as independent contractors can result in liability under the Fair Labor Standards Act of 1938.

Question 5

Non-compete agreements are governed by federal law.

Question 6

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.

Question 7

If an agent acts without authority of the principal, the principal is not liable for any resulting loss to a third party.

Question 8

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.

Question 9

The Civil Rights Act of 1866 applies to employers with 15 or more employees.

Question 10

Under the economic realities test, courts consider whether the worker is economically dependent on a particular enterprise or works for himself or herself.

Question 11

An employer is vicariously liable for the actions of an employee causing harm to a third party outside the course of employment.

Question 12

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.

Question 13

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.
D) Drew'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.

Question 14

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.

Question 15

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.

Question 16

There is one commonly accepted definition of "employee" used by courts.

Question 17

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.

Question 18

The Rehabilitation Act applies to federal contractors with contracts with the federal government in excess of $10,000 annually.

Question 19

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.

Question 20

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.

Question 21

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.
C) BRC 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.
D) BRC 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.

Question 22

For the last 6 years, Mega Big Box Stores has utilized programmers at its headquarters to maintain its online retail operation. As the size of the online business grew, Mega changed the status of the programmers who maintain the website from employees to contractors. For the past 3 years all new programmers brought on board have signed documents classifying them as independent contractors. Some of the programmers brought a court case regarding their status and got a verdict that they were misclassified.

A) The Internal Revenue Service (IRS) can hold Mega liable for its share of Social Security (FICA), and federal unemployment compensation (FUTA) taxes that it did not withhold from the programmers' compensation.
B) The IRS can subject Mega to an additional penalty equal to 20 percent of the FICA that should have been withheld, plus 1.5 percent of the wages received by the employees.
C) Mega may be found liable for accrued but unpaid benefits under the Employee Retirement Income Security Act of 1974 (ERISA).
D) All of the above

Question 23

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.

Question 24

An employer operating a private membership club must comply with which one of the following laws, even though the business does not serve the general public?

A) Title VII of the Civil Rights Act of 1964.
B) The Americans with Disabilities Act.
C) The Age Discrimination in Employment Act.
D) The Pregnancy Discrimination Act.

Question 25

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.

Question 26

Patty owned Patty's Cakes in Jacksonville, Florida. She sold her business to Fruity's, Inc. a national pastry company. There was a non-compete agreement in the contract for the sale of her business. In the non-compete, Patty agreed not to work in any capacity in the food industry for 10 years on the entire east coast. A court would likely determine that the non-compete agreement

A) violates federal law
B)
B) is unenforceable
C) is enforceable
D) Both A and

Question 27

Clarence works as an independent contractor for the law firm of Kafka, Rivera and Grisham.

A) Clarence will be responsible for making payments for his Social Security (FICA), estimated federal income tax payments, estimated state income tax payments and Medicare.
B) Clarence will be responsible for making payments for his FICA and Medicare and the law firm will be responsible for withholding payroll deductions for his federal and state income taxes.
C) Clarence will be responsible for making payments for his Social Security (FICA) and Medicare, but the law firm will be responsible for making estimated federal income tax payments, estimated state income tax payments for him.
D) Clarence will be responsible for making payments for his Social Security (FICA), withholding payroll deductions for his federal and state income taxes and Medicare.

Question 28

Benjamin, a 55 year old white male, is employed as a Black Jack Dealer at the Paramount Casino on the Mannahoak Indian tribe reservation. He applied for a promotion to Table Games Supervisor but the job went to a 26 year old oriental female. Ben filed a complaint with the EEOC alleging discrimination based on race, sex, and age.

A) Ben cannot bring a complaint of race, sex or age discrimination because Indian tribes are exempt from coverage under Title VII of the Civil Rights Act and the Age Discrimination in Employment Act.
B) Ben can bring a complaint of race and sex discrimination, but not age discrimination because Indian tribes are not exempt from coverage under Title VII of the Civil Rights Act but they are exempt from the Age Discrimination in Employment Act.
C) Ben can bring a complaint of age discrimination, but not race and sex discrimination, because Indian tribes are not exempt from coverage under the Age Discrimination in Employment Act but are exempt from coverage under Title VII of the Civil Rights Act.
D) Ben should have brought a claim under the Americans with Disabilities Act because there is no exemption for Indian tribes under the ADA.

Question 29

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.

Question 30

Carl was employed as a landscape designer with Splendid Gardens Landscape and Design firm in Winston-Salem, North Carolina. He signed a covenant not to compete agreement when he was hired 2 years ago. The agreement states that Carl cannot work in Splendid's territory for 1 year after his employment ends. The agreement stipulates that Splendid's territory constitutes a 30 mile radius of Winston-Salem, N.C. Carl has been working part-time for himself. When his employer finds out, he is terminated. Carl wants to take a new position with Harold's Garden in Greensboro, North Carolina which is 20 miles away.

A) Carl can take the job because he did not understand the consequences of the covenant not to compete clause.
B) Carl can take the job because even though Harold's is in Splendid's territory, he is not planning on contacting any of his former clients.
C) Carl cannot take the job if the geographical and time restrictions are deemed to be reasonable by the courts.
D) None of the choices are correct.

Question 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

Question 32

After graduating from college with a bachelor's degree in business administration, Emily, sent an email, with a resume attached, to the Encyclopedic Marketing Company. In the email she expressed an interest in being considered for an entry level position in Encyclopedic's management training program. When she found out that Encyclopedic had hired two of her classmates who were not of her race, Emily filed a complaint of discrimination under Title VII of the Civil Rights Act.

A) Emily has a good case against Encyclopedic because her email told them that she was interested in a management trainee position and they didn't even consider her.
B) If Emily really wants to be a management trainee she should go back to school and get an MBA.
C) Emily will not prevail on her complaint because sending an e-mail inquiry about a job does not qualify the sender as an applicant.
D) Emily would have had a case against Encyclopedic if she had submitted her resume via an online job board.

Question 33

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.

Question 34

Pilar is hired by Axel, Inc as an independent contractor. To avoid a determination by the IRS that Pilar has been misclassified as an independent contractor, Axel should:

A) provide training to Pilar
B) pay her by the hour
C) pay FICA
D) None of the above

Question 35

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.

Question 36

For a non-compete agreement to be enforced by a court, the agreement must be reasonable

A) as to scope and duration.
B) as to consideration and duration.
C) as to scope and consideration.
D) as to a legitimate business interest.

Question 37

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.

Question 38

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.

Question 39

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.
B) The 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.
C) The 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.

Question 40

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.

Question 41

Cara sends an email to Lorette Products inquiring about a job announcement for a sales associate position she saw posted on the internet. Sung interviews for a sales associate position with a Lorette HR representative during campus interviews at his university. Discuss whether Cara and Sung are applicants and discuss why this information is relevant to Lorette.

Question 42

An employer can pursue a claim against a former employee under The Uniform Trade Secrets Act if it can show
I that the company makes a reasonable effort to keep the information a secret.
II the former employee takes a position with a competitor that requires the employee to divulge or use the previous employer's secrets.
III that the information is protected by federal copyright laws.

A) I and II only.
B) II and III only.
C) I and III only.
D) All of the choices are correct.

Question 43

Why is it important to classify workers correctly as either employees or independent contractors?

Question 44

Under the inevitable disclosure theory, a court may

A) allow an employee to disclose trade secrets of his former employer under certain circumstances
B) prohibit an employee from working for a former employer's competitor
C) prohibit an employee from disclosing the trade secrets of the employee's former employer
D) None of the above.

Question 45

Following the ruling in Murray v. Principal Financial Group, Inc., a court would determine whether a worker is an employee or an independent contractor by:

A) evaluating the hiring party's right to control the manner and means by which the work is done.
B) applying the IRS 20-factor analysis.
C) determining whether the worker is economically dependent on the business.
D) applying a hybrid approach.

Question 46

Lopez, Inc is an educational consulting company. It has a staff of 27 employees and 5 independent contractors. All of the employees and independent contractors are of Hispanic descent. Lopez needs to hire one sales person and one computer programmer for a project. It intends to hire an employee to fill the position of full-time sales person. It intends to hire an independent contractor for the programming project. Lee, an Asian male applies for the programmer project. Larry, a white male, applies for the sales person position. Neither Lee nor Larry is hired. Both learn that Lopez, not only has a history of only hiring Hispanics, but that it, indeed, hired Hispanics for the sales person and independent contractor positions. Do either Lee or Larry have a claim for discrimination under federal law?

Question 47

In NLRB v. Friendly Cab Co., the federal court:

A) for the first time allowed jury trials in Title VII cases.
B) held that Friendly's cab drivers were independent contractors.
C) held that Friendly's cab drivers were employees.
D) held that Friendly's supervisors were employees and their cab drivers were independent contractors.

Question 48

Describe how the freedom to contract is important to a free market and explain why Congress has passed laws to regulate the employment relationship.

Question 49

Under the inevitable disclosure theory, a court may prohibit an employee from working for a former employer's competitor, if the employer can show that there is imminent threat that a trade secret will be shared and
I) the employee's knowledge is exceptionally specialized and technical.
II) the employee has intent to disclose the secret.
III) the trade secret would give the former employer's competitor a significant advantage in the market.

A) I and II.
B) II and III.
C) I and III.
D) I, II, and III.

Question 50

List the four criteria that must be satisfied by an employer to classify a worker as an independent contractor.