Employment Law for Business 10th Edition

TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Agency law, based on the traditional law called master and servant, governs employment relationships. ⊚ true ⊚ false 2) In an employment-agency relationship, if an agent acts beyond his or her authority, the principal may be liable for any resulting loss to a third party. ⊚ true ⊚ false 3) Myra provides accounting services as an independent contractor for Great Northern. Because of this relationship, Great Northern is responsible for withholding and paying Myra's employment taxes, including federal unemployment compensation (FUTA), Social Security (FICA) and FICA excise tax. ⊚ true ⊚ false 4) Employers are not liable for most torts committed by an independent contractor within the scope of the working relationship. ⊚ true ⊚ false 5) There is a single commonly accepted definition of "employee" used by courts, employers, and the government. ⊚ true ⊚ false 6) Fresh Ideas employs part-time workers through a staffing firm. After the staffing firm sent over a part-time office assistant, Fresh Ideas asked the firm to replace her with someone from a different race. The replaced office assistant cannot proceed with a discrimination claim under Title VII of the Civil Rights Act since she (the part-time office assistant) was never an employee of Fresh Ideas. ⊚ true ⊚ false MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 7) If an employee has a car accident while driving a company car from one company office to another, the employer may be liable to the owner of the other vehicle under which legal theory? A) Vicarious liability B) Joint liability C) Strict liability D) Negligence 8) Which federal law protects employees from unfair labor practices of employers? A) Occupational Safety and Health Act B) National Labor Relations Act C) Fair Labor Standards Act D) Labor Management Relations Act 9) A willful misclassification of workers by an employer may result in harsh sanctions, including imprisonment and a fine of up to $10,000, under which federal law? A) Federal Unemployment Compensation Act (FUTA) B) Fair Labor Standards Act (FLSA) C) National Labor Relations Act (NLRA) D) Federal Insurance Contributions Act (FICA) 10) Which of the following is currently considered to be the leading test to determine employee status? A) Common-law agency test B) IRS 20-factor analysis C) Economics realities test D) Degree of control test Answer Key Test name: chapter 1 1) TRUE 2) TRUE In an employment-agency relationship, the employee-agent is under a specific duty to the principal to act only as authorized. As a rule, if an agent goes beyond his or her authority or places the property of the principal at risk without authority, the principal is responsible to the third party for all loss or damage naturally resulting from the agent's unauthorized acts (while the agent remains liable to the principal for the same amount). 3) FALSE 4) TRUE Employers are prohibited from discriminating against their employees under Title VII of the Civil Rights Act. This same prohibition against discrimination does not apply from employers to independent contracts. In addition, employers are generally not liable for most torts committed by an independent contractor within the scope of the working relationship. Determining one’s status as an employee or an independent contractor is important for many reasons. 5) FALSE 6) FALSE Fresh Ideas can be found liable because an employer using a staffing firm cannot avoid liability for discriminating against a temporary worker merely because it did not "employ" the worker. Employers may be held liable as "third-party interferers" under Title VII of the Civil Rights Act of 1964. For example, if an employer decides to ask its staffing firm to replace the temporary receptionist with one of another race, the receptionist could proceed with a Title VII claim against the employer because it improperly interfered with her employment opportunities with the staffing firm. 7) A An employer has vicarious liability if an employee causes harm to a third party while the employee is in the course of employment. While the employee may be required to reimburse the employer if the employer has to pay for the damages, generally the third party goes after the employer because the employee does not have the funds to pay the liability. 8) B The National Labor Relations Act of 1935 (NLRA) protects employees from unfair labor practices. However, employees may be considered to be employers; so they may be subject to these regulations from the other side of the fence. 9) B An employer who maintains employees has the responsibility to pay Social Security (FICA), the FICA excise tax, Railroad Retirement Tax Act (RRTA) withholding amounts, federal unemployment compensation (FUTA), Internal Revenue Service (IRS) federal income tax withholdings, Medicare, and state taxes. Employers may intentionally misclassify employees in order to avoid these other costs and liabilities. A willful misclassification under the Fair Labor Standards Act of 1938 (FLSA) may result in imprisonment and up to a $10,000 fine, imposed by the Department of Labor. 10) A The common-law agency test is now considered to be the leading test to determine employee status.