Quiz 1 - BUSI-4334

Title I of the Americans with Disabilities Act (ADA) of 1990 applies to:

all employers with 15 or more workers, including state and local government, employment agencies, and labor unions. Explanation Title I of the Americans with Disabilities Act (ADA) of 1990 applies to all employers engaged in interstate commerce with 15 or more workers, including state and local government employers, employment agencies, labor unions, and joint labor-management committees.

Salvatore and Annette are sales managers for Acme USA. Both work full-time in the Acme offices under the same manager, and share the same type of job responsibilities. Salvatore was hired as an employee and is paid a salary. Required federal and state tax withholdings are made by Acme for Salvatore. Annette was hired as an independent contractor and is paid by the project. No federal and state withholdings are taken for Annette, and she does not receive retirement or health insurance benefits. Which of the following is the likely true?

Acme willfully misclassified Annette as an independent contractor and is liable under Fair Labor Standards Act of 1938. Explanation Acme willfully misclassified Annette as an independent contractor and is liable under Fair Labor Standards Act (FLSA) of 1938. Where a worker is considered an employee, the FLSA regulates the amount of money an employee must be paid per hour and overtime compensation. Employers may intentionally misclassify employees in order to avoid these and other costs and liabilities. A willful misclassification under FLSA may result in imprisonment and up to a $10,000 fine, imposed by the Department of Labor.

Colton was hired by Varney Associates in Atlanta, Georgia as its chief architect. At the time of his hire (two years ago), Colton signed a covenant not to compete stating that he cannot work with Varney's competitors in the state of Georgia for a period of one year in case his employment with Varney Associates ends. Varney found out that Colton was working part-time for himself, and immediately terminated him. Colton is now interested in being an architect for Team Architect in Macon, Georgia. Which of the following might be true in this situation?

Colton cannot work for Team Architect if the location and time restrictions in the covenant not to compete agreement are deemed to be reasonable by a court. Explanation Colton cannot take the job with Team Architect if the location and time restrictions in the covenant-not-to-compete agreement are deemed reasonable by a court. To determine reasonableness, courts look to the location and time limitations placed on the employee's ability to compete.

There is a single commonly accepted definition of "employee" used by courts, employers, and the government.

FALSE Explanation The courts, employers, and the government are unable to agree on one definition of "employee" and "employer," so it varies, depending on the situation and the law being used. In addition, some statutes do not give effective guidance.

Jack, a 43 year old white male, applied for a job at a private club. He was not hired. During the application process, Jack noticed that the club employed younger, white male individuals. Can Jack file a discrimination claim under the ADEA (Age Discrimination in Employment Act) against the club?

Jack can file a complaint because the act does not exempt private membership clubs. Explanation Jack can file a complaint under the Age Discrimination in Employment Act (ADEA) of 1967 because the act does not exempt private membership clubs. Those exempted from ADEA are American employers who control foreign firms where compliance with the ADEA in connection with an American employee would cause the foreign firm to violate the laws of the country in which it is located.

Roger is a freelance accountant hired by Rudy's Hot Dogs whenever auditing work is needed in the back office. Roger is called to the office on a need basis and is paid $200 per day for his services. Which of the following is likely true of this scenario?

Roger cannot make a claim for medical or retirement benefits from Rudy's Hot Dogs as he is an independent contractor. Explanation Roger cannot claim for medical or retirement benefits from Rudy's Hot Dogs because he is an independent contractor. In an effort to attract and retain superior personnel, employers offer employees a range of benefits that generally are not required to be offered such as dental, medical, pension, and profit-sharing plans. Independent contractors have no access to these benefits.

An employer has vicarious liability if an employee causes harm to a third party while the employee is in the course of employment.

TRUE Explanation 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.

Employers are not liable for most torts committed by an independent contractor within the scope of the working relationship.

TRUE Explanation Employers are not liable for most torts committed by an independent contractor within the scope of the working relationship because Title VII of the Civil Rights Act of 1964 applies to employers and prohibits them from discriminating against employees. It does not, however, cover discrimination against independent contractors.

One criteria for determining whether a worker is an employee or an independent contractor is the economic realities test. Under the economic realities test, a court considers whether a worker is economically dependent on the business, or is in business for himself or herself.

TRUE Explanation Under the economic realities test, courts consider whether a worker is economically dependent on the business or, as a matter of economic fact, is in business for himself or herself. In applying the economic realities test, courts look to the degree of control exerted by the alleged employer over the worker, the worker's opportunity for profit or loss, the worker's investment in the business, the permanence of the working relationship, the degree of skill required by the worker, and the extent the work is an integral part of the alleged employer's business.

An employer who operates a private membership club (one that does not serve the general public) may be liable under:

The Age Discrimination in Employment Act of 1967. Explanation The Age Discrimination in Employment Act of 1967 (ADEA) prohibits discrimination in employment against anyone over the age of 40. ADEA, unlike Title VII of the Civil Rights Act of 1964, does not exempt Indian tribes or private membership clubs.

The Plumbing Company (TPC) employs 2 supervisors, 7 plumbers, 4 helpers, 2 schedulers, 2 carpenters and 1 office manager. All are permanent, full-time (8 hours per day) workers. Are the employees of TPC covered under the provisions of Title I of the Americans with Disabilities Act (ADA) of 1990, Title VII of the Civil Rights Act of 1964, and the Age Discrimination in Employment Act (ADEA) of 1967?

The employees are covered under Title VII of the Civil Rights Act and the Americans with Disabilities Act, but not under the Age Discrimination in Employment Act. Explanation The employees of TPC are covered by Title VII of the Civil Rights Act of 1964 and Title I of the Americans with Disabilities Act of 1990. Both the acts apply to all firms or their agents engaged in an industry affecting commerce that employ 15 or more employees. However, the Age Discrimination in Employment Act of 1967 applies only to entities or their agents that employ 20 or more employees on each working day.

Which of the following factors is part of the economic realities test used by courts to determine whether a worker is an employee or an independent contractor?

The worker's investment in an employer's business. Explanation In applying the economic realities test, courts look to the degree of control exerted by an alleged employer over a worker, the worker's opportunity for profit or loss, the worker's investment in the business, the permanence of the working relationship, the degree of skill required by the worker, and the extent the work is an integral part of the alleged employer's business. Typically, all of these factors are considered as a whole with none of the factors being determinative.

Acme Solutions often hires Nicco to train its employees. He is paid $300 for every session. His job also requires him to travel once a month to different branches of Acme Solutions and train employees there. When he is required to travel, the company pays him $450 per session. All training materials have to be provided by Nicco himself. When he is not hired by Acme Solutions, Nicco works for other smaller companies as a trainer. Thus, Nicco is mostly like a(n):

independent contractor for Acme Solutions Explanation Nicco is mostly like an independent contractor for Acme Solutions. An independent contractor is generally a person who contracts with a principal to perform a task according to her or his own methods and who is not under the principal's control regarding the physical details of the work.

As used by the Equal Employment Opportunity Commission (EEOC), the term contingent worker includes a(n):

independent contractor. Explanation A contingent worker is one whose job with an employer is temporary, is sporadic, or differs in any way from the norm of full-time employment. As used by the Equal Employment Opportunity Commission (EEOC), the term contingent worker includes those who are hired by an employer through a staffing firm, as well as temporary, seasonal, and part-time workers, and those considered to be independent contractors rather than employees.

Employment law based on agency principles imposes a duty on an employee to act as authorized. If the employee exceeds his or her authority, the employer is:

liable for damages or losses incurred by third parties, while the employee remains liable to the employer. Explanation 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 her authority or places the property of the principal at risk without authority, the principal is now 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).

To be enforceable by a court, a non-compete agreement within an employment relationship:

must have a reasonable scope and duration. Explanation Generally, in order to be considered reasonable, the restrictive covenant will meet the following qualifications:1. It protects a legitimate business interest.2. It is ancillary to a legitimate business relationship.3. It provides a benefit to both the employee and employer.4. It is reasonable in scope and duration.5. It is not contrary to the public interest.

The provisions of Title VII of the Civil Rights Act of 1964:

prohibit discrimination in employment based on specified protected class. Explanation Title VII of the Civil Rights Act of 1964 prohibits discrimination in employment based on specified protected class. It applies generally to all firms or their agents engaged in an industry affecting commerce that employ 15 or more employees for each working day in the current or preceding calendar year.

According to the Office of Federal Contract Compliance Programs (OFCCP), one of the criteria for an individual to qualify as an Internet applicant for a job is to:

submit an expression of interest in employment through the Internet Explanation According to the Office of Federal Contract Compliance Programs, there are four criteria that define an Internet applicant:1. The individual submits an expression of interest in employment through the Internet or related electronic data technologies.2. The employer considers the individual for employment in a particular position.3. The individual's expression of interest indicates the individual possesses the basic qualifications for the position.4. The individual does not remove himself or herself from the selection process at any time prior to receiving an offer or otherwise indicate that he is no longer interested in the position.Thus an e-mail inquiry about a job does not qualify the sender as an applicant, nor does posting a resume on a third-party job board.

The three main tests courts use to classify employees and independent contractors are:

the common-law agency test, the Internal Revenue Service (IRS) 20-factor analysis, and the economic realities test. Explanation Several tests have been developed and are commonly used by courts to classify employees and independent contractors. These tests include the common-law test of agency, which considers several factors but focuses on who has the right to control the work; the Internal Revenue Service (IRS) 20-factor analysis; and the economic realities test.

A non-compete agreement (or covenant not to compete) is generally enforceable when:

the employee receives something in exchange for the agreement. Explanation To be enforceable, a non-compete agreement must be supported by consideration offered in a bargained-for exchange. In other words, the employee must receive something in exchange for his agreement not to compete with his employer. Often a non-compete agreement is signed at the time an employee is first hired. In most cases, the offer of employment is considered to be sufficient consideration for the agreement.