TEST BANK
EMPLOYMENT LAW FOR BUSINESS
Page | 1
, chapter 01
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
Page | 2
,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)
Page | 3
, 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
11) how many employees must an entity have under the civil rights act of 1866 to qualify as an
employer under the act?
A) 15 employees
B) 20 employees
C) 50 employees
D) no minimum requirement
12) the rehabilitation act of 1973 applies to government contractors that maintain contracts with the
federal government in excess of how much annually?
A) $1,000
B) $5,000
C) $10,000
D) no minimum dollar amount
13) cms, inc. solicited bids from various contractors to develop and maintain the grounds of its new
office complex. roberta, the head of facilities management at cms, told her secretary, leanne, that she
will not accept any bids from a russian contractor. she then rejected a bid made by a russian contractor
without any legitimate reason. if the russian contractor brings a lawsuit against cms for discrimination,
what is the likely result?
A) roberta's refusal to hire russian contractors will be found to be a violation of the social security
act.
Page | 4
EMPLOYMENT LAW FOR BUSINESS
Page | 1
, chapter 01
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
Page | 2
,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)
Page | 3
, 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
11) how many employees must an entity have under the civil rights act of 1866 to qualify as an
employer under the act?
A) 15 employees
B) 20 employees
C) 50 employees
D) no minimum requirement
12) the rehabilitation act of 1973 applies to government contractors that maintain contracts with the
federal government in excess of how much annually?
A) $1,000
B) $5,000
C) $10,000
D) no minimum dollar amount
13) cms, inc. solicited bids from various contractors to develop and maintain the grounds of its new
office complex. roberta, the head of facilities management at cms, told her secretary, leanne, that she
will not accept any bids from a russian contractor. she then rejected a bid made by a russian contractor
without any legitimate reason. if the russian contractor brings a lawsuit against cms for discrimination,
what is the likely result?
A) roberta's refusal to hire russian contractors will be found to be a violation of the social security
act.
Page | 4
