LSTD 2106 Exam 3 Questions and Answers Solved 100%
Agency - Answers A legal relationship in which the parties agree that one party will act as an agent for
another party, called the principal, subject to the control of the principal
Classification of Agents - Answers -Employee agents
-Independent contractor agents
-gratuitous agents
Employee Agents - Answers Individual employees who are authorized to transact business on behalf of
the employer principal (Principles liable)
Independent Contractor Agents - Answers They are not considered employees and have no legal
protections of employees such as FLSFA
Gratuitous Agent - Answers Agents who act on behalf of a principal without receiving any compensation
State Law - ABC Test - Answers 1. The individual is free from direction and control
2. The service is performed outside the usual course of business of the employer
3. The individual is customarily engaged in an independently established trade, occupation, profession,
or business of the same nature
IRS's Three-Prong Test - Answers -Behavioral aspects of the agency
-The financial arrangements between principal and agent
-The type of working relationship between the parties
Negligent Hiring Doctrine - Answers Employers must take reasonable steps to protect third parties,
particularly customers and other employees, from harm at the hands of an employee
Fiduciary duty - Answers -Loyalty
-Obedience
-Care
-Disclosure
-Accounting
Principal's Duties - Answers -Reimburse
-Indemnify
, Agent's Duties - Answers -Centerpiece - Act in the principles best interest
-Accounting- Principle can ask "What da business is?"
Employment-at-will Doctrine - Answers Permits employers to terminate an at-will employee with or
without advance notice and with or without just cause, subject to certain exceptions
Employment-at-will Doctrine Exceptions - Answers 1. The employee has an express contract
2. Courts have fashioned a common law exception
3. There is some specific statutory protection against job termination
Whistle-Blower Statute - Answers Unique by state; however, whistle-blowers are most commonly
protected when they report the violation of a law or standard by their employer to the authorities
FLSA - Answers Fair Labor Standards Act
-Minimum wage, overtime, child labor, etc.
FLSA Exempt vs. Non-exempt - Answers -Education or skill level or certifications required for the
position, salary level, compensation method
-Amount of physical labor required
-Amount of repetitive tasks
Degree of supervision required by the employer
ERISA - Answers Employee Retirement Income Security Act
-Requires employers to make certain disclosures related to investment risk and provides transparency
for plan beneficiaries (retirement plans)
SSA - Answers Social Security Act
-Employees are entitled to retirement benefits based on how many credits they have earned during
their working life
HIPPA - Answers Health Insurance Portability and Accountability Act
-Rules designed to protect employee medical records from disclosure
COBRA - Answers Consolidated Omnibus Budget Reconciliation Act
-Mandates that employers offer continuous coverage eligibility to an employee who has been
terminated
FUTA - Answers Federal Unemployment Tax Act
Agency - Answers A legal relationship in which the parties agree that one party will act as an agent for
another party, called the principal, subject to the control of the principal
Classification of Agents - Answers -Employee agents
-Independent contractor agents
-gratuitous agents
Employee Agents - Answers Individual employees who are authorized to transact business on behalf of
the employer principal (Principles liable)
Independent Contractor Agents - Answers They are not considered employees and have no legal
protections of employees such as FLSFA
Gratuitous Agent - Answers Agents who act on behalf of a principal without receiving any compensation
State Law - ABC Test - Answers 1. The individual is free from direction and control
2. The service is performed outside the usual course of business of the employer
3. The individual is customarily engaged in an independently established trade, occupation, profession,
or business of the same nature
IRS's Three-Prong Test - Answers -Behavioral aspects of the agency
-The financial arrangements between principal and agent
-The type of working relationship between the parties
Negligent Hiring Doctrine - Answers Employers must take reasonable steps to protect third parties,
particularly customers and other employees, from harm at the hands of an employee
Fiduciary duty - Answers -Loyalty
-Obedience
-Care
-Disclosure
-Accounting
Principal's Duties - Answers -Reimburse
-Indemnify
, Agent's Duties - Answers -Centerpiece - Act in the principles best interest
-Accounting- Principle can ask "What da business is?"
Employment-at-will Doctrine - Answers Permits employers to terminate an at-will employee with or
without advance notice and with or without just cause, subject to certain exceptions
Employment-at-will Doctrine Exceptions - Answers 1. The employee has an express contract
2. Courts have fashioned a common law exception
3. There is some specific statutory protection against job termination
Whistle-Blower Statute - Answers Unique by state; however, whistle-blowers are most commonly
protected when they report the violation of a law or standard by their employer to the authorities
FLSA - Answers Fair Labor Standards Act
-Minimum wage, overtime, child labor, etc.
FLSA Exempt vs. Non-exempt - Answers -Education or skill level or certifications required for the
position, salary level, compensation method
-Amount of physical labor required
-Amount of repetitive tasks
Degree of supervision required by the employer
ERISA - Answers Employee Retirement Income Security Act
-Requires employers to make certain disclosures related to investment risk and provides transparency
for plan beneficiaries (retirement plans)
SSA - Answers Social Security Act
-Employees are entitled to retirement benefits based on how many credits they have earned during
their working life
HIPPA - Answers Health Insurance Portability and Accountability Act
-Rules designed to protect employee medical records from disclosure
COBRA - Answers Consolidated Omnibus Budget Reconciliation Act
-Mandates that employers offer continuous coverage eligibility to an employee who has been
terminated
FUTA - Answers Federal Unemployment Tax Act
