S
C
O
D
SE
R
U
N
, CHAPTER 01
The Regulation of Employment
True / False Questions
N
1. (p. 7) 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
U
liability for the employer.
TRUE
R
Difficulty: 1 Easy
SE
2. (p. 8) Misclassification of employees as independent contractors can result in liability under
the Fair Labor Standards Act of 1938.
TRUE
Difficulty: 1 Easy
D
3. (p. 7) If an agent acts without authority of the principal, the principal is not liable for any
resulting loss to a third party.
O
FALSE
C
Difficulty: 1 Easy
4. (p. 7) There is one commonly accepted definition of "employee" used by courts.
S
FALSE
Difficulty: 1 Easy
,5. (p. 9) An employer is vicariously liable for the actions of an employee causing harm to a
third party outside the course of employment.
FALSE
Difficulty: 2 Medium
6. (p. 16) Under the economic realities test, courts consider whether the worker is economically
N
dependent on a particular enterprise or works for himself or herself.
TRUE
U
Difficulty: 1 Easy
R
7. (p. 16) 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.
FALSE
SE
Difficulty: 1 Easy
8. (p. 8) Marco provides accounting services to the Consolidated Bank as an independent
D
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.
FALSE
O
Difficulty: 1 Easy
C
9. (p. 11) Willful violations of FLSA subject an employer to criminal liability.
TRUE
S
Difficulty: 1 Easy
, 10. (p. 8, 13) 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.
FALSE
Difficulty: 2 Medium
11. (p. 20) The Wonder City Restaurant uses a staffing firm to obtain temporary workers. After
N
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.
FALSE
U
R
Difficulty: 1 Easy
12. (p. 28) Non-compete agreements are governed by federal law.
FALSE
SE
Difficulty: 2 Medium
13. (p. 26) The Civil Rights Act of 1866 applies to employers with 15 or more employees.
D
FALSE
O
Difficulty: 2 Medium
14. (p. 27) The Rehabilitation Act applies to federal contractors with contracts with the federal
C
government in excess of $10,000 annually.
TRUE
S
Difficulty: 2 Medium
C
O
D
SE
R
U
N
, CHAPTER 01
The Regulation of Employment
True / False Questions
N
1. (p. 7) 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
U
liability for the employer.
TRUE
R
Difficulty: 1 Easy
SE
2. (p. 8) Misclassification of employees as independent contractors can result in liability under
the Fair Labor Standards Act of 1938.
TRUE
Difficulty: 1 Easy
D
3. (p. 7) If an agent acts without authority of the principal, the principal is not liable for any
resulting loss to a third party.
O
FALSE
C
Difficulty: 1 Easy
4. (p. 7) There is one commonly accepted definition of "employee" used by courts.
S
FALSE
Difficulty: 1 Easy
,5. (p. 9) An employer is vicariously liable for the actions of an employee causing harm to a
third party outside the course of employment.
FALSE
Difficulty: 2 Medium
6. (p. 16) Under the economic realities test, courts consider whether the worker is economically
N
dependent on a particular enterprise or works for himself or herself.
TRUE
U
Difficulty: 1 Easy
R
7. (p. 16) 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.
FALSE
SE
Difficulty: 1 Easy
8. (p. 8) Marco provides accounting services to the Consolidated Bank as an independent
D
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.
FALSE
O
Difficulty: 1 Easy
C
9. (p. 11) Willful violations of FLSA subject an employer to criminal liability.
TRUE
S
Difficulty: 1 Easy
, 10. (p. 8, 13) 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.
FALSE
Difficulty: 2 Medium
11. (p. 20) The Wonder City Restaurant uses a staffing firm to obtain temporary workers. After
N
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.
FALSE
U
R
Difficulty: 1 Easy
12. (p. 28) Non-compete agreements are governed by federal law.
FALSE
SE
Difficulty: 2 Medium
13. (p. 26) The Civil Rights Act of 1866 applies to employers with 15 or more employees.
D
FALSE
O
Difficulty: 2 Medium
14. (p. 27) The Rehabilitation Act applies to federal contractors with contracts with the federal
C
government in excess of $10,000 annually.
TRUE
S
Difficulty: 2 Medium
