Business Management And Law Ch 9: Human Resource Test

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Business Management And Law Ch 9: Human Resource Test - Quiz

A human resource manager is tasked with ensuring that he hires the right staff to get the company to where it wants to be. Having covered human resource management in chapter 9 of Business Management and Law, it is important to test how much you understand it. Take it up, and good luck!


Questions and Answers
  • 1. 

    Examples are construction companies, engine manufacturers, and coal mines.

    • A.

      Service-producing industries

    • B.

      Goods-producing industries

    • C.

      Dirty jobs

    • D.

      Fast-growth industries

    Correct Answer
    B. Goods-producing industries
    Explanation
    The given correct answer is "goods-producing industries". This is because the examples provided, such as construction companies, engine manufacturers, and coal mines, are all involved in the production of physical goods. These industries are focused on manufacturing, extracting, or constructing products rather than providing services.

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  • 2. 

    An employee hired for a specific time or to complete a specific assignment.

    • A.

      Temporary employee

    • B.

      Mercenary

    • C.

      Permanent employee

    • D.

      At-will employee

    Correct Answer
    A. Temporary employee
    Explanation
    A temporary employee is someone who is hired for a specific time period or to complete a specific assignment. Unlike permanent employees, they are not employed on a long-term basis and their employment is typically temporary in nature. Temporary employees are often brought in to fill a short-term need within an organization, such as covering for a regular employee's absence or assisting with a specific project. They may be hired directly by the organization or through a staffing agency.

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  • 3. 

    Employment growth is expected to be slowest over the next few years in which of the following occupational categories?

    • A.

      Professional

    • B.

      Management

    • C.

      Sales and marketing

    • D.

      Production

    Correct Answer
    D. Production
    Explanation
    The correct answer is production. This means that employment growth in the production occupational category is expected to be the slowest over the next few years compared to the other categories listed. This could be due to various factors such as automation and outsourcing, which may lead to a decrease in job opportunities in the production sector.

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  • 4. 

    An organized group of employees who negotiate with employers about issues such as wages and working conditions is a ___.

    • A.

      Cooperative

    • B.

      Credit union

    • C.

      Labor union

    • D.

      Joint venture

    Correct Answer
    C. Labor union
    Explanation
    A labor union is an organized group of employees that represents and negotiates on behalf of its members with employers regarding various employment-related matters, such as wages, working conditions, benefits, and rights. Labor unions aim to protect the interests and rights of workers, ensuring fair treatment, better working conditions, and improved compensation. They play a crucial role in advocating for workers' rights and addressing any grievances or concerns they may have collectively.

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  • 5. 

    If your job involves a great deal of manual work, you are probably a ___.

    • A.

      Blue-collar worker

    • B.

      White-collar worker

    • C.

      Pink-collar worker

    • D.

      Green-collar worker

    Correct Answer
    A. Blue-collar worker
    Explanation
    A blue-collar worker is someone whose job involves manual labor and physical work. They typically work in industries such as manufacturing, construction, or transportation. This term is used to describe individuals who perform tasks that require physical strength or skill rather than office-based or managerial work. Therefore, if your job involves a great deal of manual work, you are most likely a blue-collar worker.

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  • 6. 

    If your job involves a great deal of mental work, you are probably a ___.

    • A.

      Blue-collar worker

    • B.

      White-collar worker

    • C.

      Pink-collar worker

    • D.

      Green-collar worker

    Correct Answer
    B. White-collar worker
    Explanation
    A white-collar worker is someone who typically performs mental or administrative work in an office setting. They are often professionals or skilled workers who use their knowledge and expertise to carry out tasks that require critical thinking and problem-solving. This is in contrast to blue-collar workers who typically perform manual labor, pink-collar workers who are employed in service industries, and green-collar workers who work in environmentally focused jobs.

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  • 7. 

    Which of the following is not a major goal of a human resources department?

    • A.

      Set prices on products and services

    • B.

      Match employees' abilities with specific jobs

    • C.

      Maintain a satisfying work environment

    • D.

      Protect employees' health and well-being

    Correct Answer
    A. Set prices on products and services
    Explanation
    The correct answer is "set prices on products and services". This is not a major goal of a human resources department because their primary focus is on managing and developing the organization's workforce. This includes tasks such as recruiting and hiring employees, training and development, performance management, and ensuring employee well-being. Setting prices on products and services is typically the responsibility of the marketing or finance department.

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  • 8. 

    A specific study of a job to identify in detail the job duties and skill requirements is called a ___.

    • A.

      Job description

    • B.

      Job classification

    • C.

      Job review

    • D.

      Job analysis

    Correct Answer
    D. Job analysis
    Explanation
    Job analysis refers to the process of studying a job in order to identify its specific duties and skill requirements. It involves collecting information about the tasks, responsibilities, qualifications, and other aspects of a job. This analysis helps in creating accurate job descriptions, determining job classifications, and conducting job reviews. Therefore, job analysis is the correct answer in this case.

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  • 9. 

    The final step in the hiring process is ___.

    • A.

      Deciding whether the employee will be temporary or permanent

    • B.

      Determining the employee's duties

    • C.

      New employee orientation

    • D.

      Conducting the job interview

    Correct Answer
    C. New employee orientation
    Explanation
    The final step in the hiring process is new employee orientation. This step involves introducing the newly hired employee to the organization, its policies, procedures, and culture. It provides them with the necessary information and resources to start their job and become productive members of the team. Orientation sessions may include a tour of the workplace, introduction to colleagues and supervisors, completion of paperwork, and training on specific job tasks or systems. It helps the employee feel welcomed, informed, and prepared for their new role.

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  • 10. 

    A compensation plan that combines wages or a salary with an additional amount based on the employee's performance is called a ___.

    • A.

      Piece rate

    • B.

      Commission

    • C.

      Time wage

    • D.

      Base plus incentive

    Correct Answer
    D. Base plus incentive
    Explanation
    A compensation plan that combines wages or a salary with an additional amount based on the employee's performance is called "base plus incentive." This means that the employee receives a base salary or wage as a guaranteed amount, and then has the opportunity to earn additional income based on their performance or meeting certain targets or goals. This type of compensation plan provides motivation for employees to perform well and achieve desired outcomes, as they have the potential to earn more than just their base salary.

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  • 11. 

    The advancement of an employee to a position with greater responsibility is called a ___.

    • A.

      Transfer

    • B.

      Promotion

    • C.

      Demotion

    • D.

      Termination

    Correct Answer
    B. Promotion
    Explanation
    Promotion refers to the advancement of an employee to a position with greater responsibility. It typically involves an increase in job title, salary, and benefits. This recognition is given to employees who have demonstrated exceptional performance, skills, and potential within their current role. Promotions are often seen as a reward for hard work and dedication, and they offer opportunities for career growth and development within an organization.

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  • 12. 

    The physical conditions and psychological atmosphere in which employees work is the ___.

    • A.

      Work environment

    • B.

      Organizational culture

    • C.

      Corporate climate

    • D.

      Ergonomic climate

    Correct Answer
    A. Work environment
    Explanation
    The correct answer is work environment. This refers to the physical conditions and psychological atmosphere in which employees work. It includes factors such as the layout of the workspace, the lighting, temperature, noise levels, and overall atmosphere. The work environment plays a crucial role in employee satisfaction, productivity, and overall well-being.

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  • 13. 

    Human resource activity involving wage, salary, and benefits planning.

    • A.

      Planning and staffing

    • B.

      Performance management

    • C.

      Compensation and benefits

    • D.

      Employee relations

    Correct Answer
    C. Compensation and benefits
    Explanation
    The correct answer is compensation and benefits because this activity specifically involves the planning of wages, salaries, and benefits for employees. This includes determining the appropriate level of compensation for different positions within the organization, as well as establishing benefits packages such as healthcare, retirement plans, and other perks. This activity is crucial for attracting and retaining talented employees, ensuring their satisfaction and motivation, and ultimately contributing to the overall success of the organization.

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  • 14. 

    ___ allows employees some choice in how their workdays and work hours are arranged.

    • A.

      Personal time

    • B.

      Family leave

    • C.

      Flextime

    • D.

      Flexplace

    Correct Answer
    C. Flextime
    Explanation
    Flextime allows employees to have some choice in how their workdays and work hours are arranged. This means that employees can have some flexibility in deciding when they start and end their workday, as well as when they take breaks. This can be beneficial for employees who have personal commitments or responsibilities outside of work, as it allows them to better manage their time and achieve a better work-life balance.

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  • 15. 

    Human resource activity involving job analysis and recruitment.

    • A.

      Planning and staffing

    • B.

      Performance management

    • C.

      Compensation and benefits

    • D.

      Employee relations

    Correct Answer
    A. Planning and staffing
    Explanation
    The correct answer is planning and staffing because this activity involves the process of identifying and determining the organization's human resource needs, as well as recruiting and selecting the right individuals to fill those positions. It involves analyzing the job requirements, determining the number and type of employees needed, and developing strategies to attract and hire qualified candidates.

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  • 16. 

    Which of these is NOT a benefit of having a policy manual?

    • A.

      Employees know what is expected of them.

    • B.

      Consistent, fair application of the rules by different managers.

    • C.

      Immunity from wrongful termination lawsuits.

    • D.

      Legal protection in the case of a termination.

    Correct Answer
    C. Immunity from wrongful termination lawsuits.
    Explanation
    Having a policy manual provides several benefits such as ensuring that employees know what is expected of them and promoting consistent and fair application of rules by different managers. It also offers legal protection in the case of termination. However, it does not provide immunity from wrongful termination lawsuits. This means that even with a policy manual, an employee can still file a lawsuit if they believe they were wrongfully terminated.

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  • 17. 

    Appraisal method in which a manager seeks input from everyone who has direct observations of an employee's work - coworkers, immediate supervisors, those supervised by the employee, and even customers.

    • A.

      360-degree feedback

    • B.

      Management by Objective (MBO)

    • C.

      Paired Comparison

    • D.

      Behavior-Focused

    • E.

      Trait-Focused

    • F.

      Psychological Appraisal

    Correct Answer
    A. 360-degree feedback
    Explanation
    360-degree feedback is an appraisal method where a manager gathers input from various sources including coworkers, immediate supervisors, subordinates, and customers to evaluate an employee's performance. This method provides a comprehensive view of an employee's strengths and weaknesses from multiple perspectives, allowing for a more accurate assessment. By involving multiple stakeholders, the 360-degree feedback method aims to provide a well-rounded evaluation and promote development and growth opportunities for the employee.

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  • 18. 

    Appraisal method in which the employer and manager agree on a set of standards for the employee to achieve, then the employee is rated based on whether s/he meets those standards.

    • A.

      360-degree feedback

    • B.

      Management by Objective (MBO)

    • C.

      Paired Comparison

    • D.

      Behavior-Focused

    • E.

      Trait-Focused

    • F.

      Psychological Appraisal

    Correct Answer
    B. Management by Objective (MBO)
    Explanation
    Management by Objective (MBO) is the correct answer because it is an appraisal method where the employer and manager establish specific objectives and goals for the employee to achieve. The employee's performance is then evaluated based on their ability to meet those objectives and goals. This method emphasizes setting clear expectations and aligning individual goals with organizational objectives, promoting employee engagement and accountability. It involves regular communication between the employee and manager to track progress and provide feedback. MBO focuses on results and encourages employee participation in the goal-setting process.

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  • 19. 

    Which of these describes an evaluation conference?

    • A.

      The manager and employee will agree on the manager's evaluation of the employee's performance.

    • B.

      The manager should share with the employee his/her observations about what the employee is doing well and on what the employee needs to improve.

    • C.

      The manager and employee agree on what the next step will be (what the employee is expected to do in the next evaluation period).

    • D.

      The manager will detail what support s/he will offer the employee in reaching the goals set.

    • E.

      The manager and employee will discuss the work habits of other employees.

    Correct Answer(s)
    B. The manager should share with the employee his/her observations about what the employee is doing well and on what the employee needs to improve.
    C. The manager and employee agree on what the next step will be (what the employee is expected to do in the next evaluation period).
    D. The manager will detail what support s/he will offer the employee in reaching the goals set.
    Explanation
    An evaluation conference is a meeting between a manager and an employee to discuss the employee's performance. During this conference, the manager should share their observations about what the employee is doing well and areas where they need to improve. The manager and employee should also agree on the next steps or expectations for the employee in the next evaluation period. Additionally, the manager should detail the support they will offer the employee in reaching their goals. This conference is not meant to discuss the work habits of other employees.

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  • 20. 

    A noncompete clause

    • A.

      Is designed to protect business secrets from being shared with former employees' new employers.

    • B.

      Must be for a reasonable time and geographic area.

    • C.

      Is an illegal restraint on trade since it attempts to control people who no longer work for the company.

    • D.

      Can only be implemented during the employment relationship, not after it ends.

    Correct Answer(s)
    A. Is designed to protect business secrets from being shared with former employees' new employers.
    B. Must be for a reasonable time and geograpHic area.
    D. Can only be implemented during the employment relationship, not after it ends.
    Explanation
    A noncompete clause is designed to protect business secrets from being shared with former employees' new employers. It must be for a reasonable time and geographic area. Additionally, it can only be implemented during the employment relationship, not after it ends.

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  • 21. 

    A planned reduction in the number of employees needed.

    • A.

      Downsizing

    • B.

      Outsourcing

    • C.

      Layoffs

    • D.

      Excess reduction

    Correct Answer
    A. Downsizing
    Explanation
    Downsizing refers to a deliberate strategy implemented by a company to reduce its workforce and cut costs. It involves a planned reduction in the number of employees needed, often through layoffs or early retirement programs. This can be done to streamline operations, increase efficiency, or adapt to changing market conditions. Outsourcing, on the other hand, involves contracting tasks or services to external companies. While both downsizing and layoffs involve reducing the number of employees, downsizing is a broader term that encompasses various strategies, whereas layoffs specifically refer to terminating employees.

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  • 22. 

    Human resource activity involving enforcement of company policy.

    • A.

      Planning and staffing

    • B.

      Performance management

    • C.

      Compensation and benefits

    • D.

      Employee relations

    Correct Answer
    D. Employee relations
    Explanation
    Employee relations refers to the activities and processes involved in managing relationships between employees and employers within an organization. It focuses on creating a positive work environment, resolving conflicts, and enforcing company policies and procedures. This includes addressing employee grievances, disciplinary actions, and ensuring compliance with legal and ethical standards. Therefore, employee relations is the most relevant activity involving the enforcement of company policy among the given options.

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  • 23. 

    Examples include insurance companies, retail stores, and dentists.

    • A.

      Service-producing businesses

    • B.

      Goods-producing businesses

    • C.

      Slow-growth industries

    • D.

      High-wage jobs

    Correct Answer
    A. Service-producing businesses
    Explanation
    Service-producing businesses refer to companies that primarily offer intangible services rather than physical goods. Examples of service-producing businesses include insurance companies, retail stores, and dentists. These businesses focus on providing services to customers, such as financial protection, selling products, or dental care. Unlike goods-producing businesses that manufacture and sell physical products, service-producing businesses focus on meeting the needs and demands of customers through the provision of services. This distinction is important in understanding the different sectors of the economy and the types of businesses that operate within them.

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  • 24. 

    Human resource activity involving managing promotions, transfers and terminations.

    • A.

      Planning and staffing

    • B.

      Performance management

    • C.

      Compensation and benefits

    • D.

      Employee relations

    Correct Answer
    B. Performance management
    Explanation
    Performance management involves managing promotions, transfers, and terminations of employees. It focuses on evaluating and improving employee performance, setting goals, providing feedback, and making decisions regarding promotions, transfers, and terminations based on performance. This activity ensures that employees are recognized and rewarded for their achievements, and that underperforming employees are identified and provided with necessary support or corrective actions. By managing promotions, transfers, and terminations, performance management contributes to the overall effectiveness and success of an organization.

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  • 25. 

    An employee to whom a company has made a long-term commitment.

    • A.

      Permanent employee

    • B.

      Temporary employee

    • C.

      At-will employee

    • D.

      Contract employee

    Correct Answer
    A. Permanent employee
    Explanation
    A permanent employee is someone who has been hired by a company with the intention of a long-term commitment. Unlike temporary employees or contract employees who are hired for a specific period or project, permanent employees are expected to stay with the company for an indefinite period. They typically receive benefits such as paid time off, health insurance, and retirement plans. This type of employee is considered to be a more stable and integral part of the company's workforce.

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  • 26. 

    Involves removing work from one company and sending it to another company to be completed at a lower cost.

    • A.

      Downsizing

    • B.

      Outsourcing

    • C.

      Layoffs

    • D.

      Terminations

    Correct Answer
    B. Outsourcing
    Explanation
    Outsourcing involves removing work from one company and sending it to another company to be completed at a lower cost. This practice is commonly used by companies to reduce expenses and increase efficiency. By outsourcing certain tasks or functions, companies can take advantage of lower labor costs in other countries or benefit from specialized expertise. It allows companies to focus on their core competencies while delegating non-core activities to external providers. Overall, outsourcing helps companies streamline operations, improve productivity, and save costs.

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  • 27. 

    Performance evaulations should be

    • A.

      Based on the manager's subjective interpretation of the employee's work.

    • B.

      Based on the manager's objective observations.

    Correct Answer
    B. Based on the manager's objective observations.
    Explanation
    Performance evaluations should be based on the manager's objective observations because subjective interpretations can be biased and unreliable. Objective observations provide a more accurate and fair assessment of an employee's work. By focusing on measurable criteria and specific behaviors, managers can provide constructive feedback and make informed decisions regarding promotions, rewards, and development opportunities. This approach also promotes transparency and helps to maintain a positive work environment.

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  • 28. 

    Sexual preference is not legally protected from discrimination anywhere in the United States.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    It's not protected under federal law, but several states and cities do have laws protecting it.

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  • 29. 

    Most jobs today require at least a high school education.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement suggests that the majority of jobs in today's world require individuals to have completed high school education. This implies that having a high school education is a minimum requirement for most job opportunities available.

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  • 30. 

    The Civil Rights Act of 1964 prohibits job discrimination based on disabilities.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The ADA regulates disability discrimination. The CRA prohibits discrimination based on race, gender, religion, color, and national origin.

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  • 31. 

    Most people in the United States who want a job, have one.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement is stating that the majority of people in the United States who are seeking employment are able to find a job. This suggests that the job market in the United States is relatively strong and that there are ample opportunities for individuals to secure employment.

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  • 32. 

    Businesses can use qualifications tests, based on any material of their choosing, to determine which employees to hire.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The Supreme Court has said that such a test must be related to the essential skills of the job, as determined by a job analysis.

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  • 33. 

    Under the Family and Medical Leave Act, all employers are required to give employees 12 weeks of paid and as much unpaid leave as is required for a family member to recover from a health-related situation.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    It's up to 12 weeks of unpaid leave. Paid leave is not required.

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  • 34. 

    Computers and technology are drastically changing white-collar jobs, but they have not yet impacted blue-collar jobs to any great degree.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    All jobs have been impacted by technology.

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  • 35. 

    Human resources are the people who work for a business.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement is true because human resources refer to the individuals who are employed by a company or organization. They are responsible for carrying out various tasks and functions within the business, such as recruitment, training, employee relations, and managing personnel. Human resources play a vital role in the overall success and functioning of a business by ensuring that the workforce is well-managed and supported.

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  • 36. 

    A full-time employee regularly works a schedule of at least 30 hours per week.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    A full-time employee is typically expected to work a minimum of 30 hours per week. This schedule allows the employee to be considered full-time and receive the associated benefits and compensation. Therefore, the statement "A full-time employee regularly works a schedule of at least 30 hours per week" is true.

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  • 37. 

    A straight salary pays an employee a specific amount of money for each hour worked.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    Salaried workers are paid per week or per month, not per hour.

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  • 38. 

    Employers are required by law to provide certain benefits to employees.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    These include Social Security, Medicare, unemployment insurance and workers' compensation insurance, and beginning next year will include health insurance.

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  • 39. 

    Performance evaluations help managers determine whether employees are helping the company reach its goals.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Performance evaluations are a crucial tool for managers to assess the effectiveness and productivity of their employees. By conducting regular evaluations, managers can identify whether employees are meeting their targets and contributing towards the company's objectives. This feedback allows managers to make informed decisions about promotions, training, and development opportunities, ensuring that the company's goals are being met. Therefore, the statement that performance evaluations help managers determine whether employees are helping the company reach its goals is true.

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  • 40. 

    Employers are forbidden by law to assign employees tasks that are not physically comfortable.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is false because there is no law that specifically forbids employers from assigning tasks that are not physically comfortable. Employers have the right to assign tasks to employees as long as they do not violate any labor laws or regulations. However, employers are generally encouraged to provide a safe and comfortable working environment for their employees to ensure their well-being and productivity.

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  • 41. 

    Managers and employees do not always have the same immediate goals.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    As a general rule, employees want more money for easier/less work while employers want more work for less money.

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  • 42. 

    If a company decides what the worker does but the worker decides how s/he does it, the worker is likely an

    • A.

      Independent contractor.

    • B.

      Employee.

    Correct Answer
    A. Independent contractor.
    Explanation
    In this scenario, the company has control over what tasks the worker performs, indicating an employment relationship. However, the worker has autonomy in determining how they complete those tasks, which aligns more with the characteristics of an independent contractor. Independent contractors typically have more flexibility and control over their work methods and are not as closely supervised by the company. Therefore, the worker is likely an independent contractor.

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  • 43. 

    If the worker makes his/her personnel decisions (who to work with, what those people do, and how much they are paid) then s/he is likely an

    • A.

      Independent contractor.

    • B.

      Employee.

    Correct Answer
    A. Independent contractor.
    Explanation
    If the worker has the authority to make decisions about who they work with, what tasks those individuals perform, and how much they are compensated, it suggests that they have a level of autonomy and control over their work. This aligns with the characteristics of an independent contractor, who typically has more freedom in determining the details of their work arrangement compared to an employee who is typically subject to the direction and control of their employer.

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  • 44. 

    If the company does not provide the worker's tools and equipment, then s/he is likely an

    • A.

      Independent contractor.

    • B.

      Employee.

    Correct Answer
    A. Independent contractor.
    Explanation
    If the company does not provide the worker's tools and equipment, it suggests that the worker is responsible for their own tools and equipment. This is a characteristic typically associated with independent contractors, who are expected to have their own tools and equipment to perform their work. In contrast, employees are usually provided with the necessary tools and equipment by the company. Therefore, the correct answer is independent contractor.

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  • 45. 

    If the worker’s agreement with the company includes benefits such as insurance and retirement funds, s/he is likely an

    • A.

      Independent contractor.

    • B.

      Employee.

    Correct Answer
    B. Employee.
    Explanation
    If the worker's agreement with the company includes benefits such as insurance and retirement funds, it suggests that the worker is likely an employee. Independent contractors typically do not receive these types of benefits as they are responsible for their own insurance and retirement planning.

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  • 46. 

    If the worker is responsible for his/her own training, s/he is likely an

    • A.

      Independent contractor.

    • B.

      Employee.

    Correct Answer
    A. Independent contractor.
    Explanation
    If the worker is responsible for his/her own training, it suggests that the worker has control over their own professional development and is not reliant on the employer for training opportunities. This aligns with the characteristics of an independent contractor, who typically has more autonomy and control over their work compared to an employee. Employees, on the other hand, usually receive training and development opportunities from their employer as part of their job responsibilities. Therefore, the correct answer is independent contractor.

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  • 47. 

    If a worker is not free to work on other jobs during the agreement with the company, s/he is likely an

    • A.

      Independent contractor.

    • B.

      Employee.

    Correct Answer
    B. Employee.
    Explanation
    If a worker is not free to work on other jobs during the agreement with the company, it suggests that the worker does not have the freedom and flexibility typically associated with being an independent contractor. Independent contractors usually have the ability to work on multiple projects simultaneously or have the autonomy to choose their own clients. On the other hand, employees are typically bound by exclusivity agreements that prevent them from taking on additional work during their employment. Therefore, if a worker is not free to work on other jobs, it is more likely that they are an employee rather than an independent contractor.

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  • 48. 

    Why does it matter if a worker is an employee or an independent contractor?

    • A.

      Employers need not pay payroll taxes on independent contractors.

    • B.

      Independent contractors don't have to be paid.

    • C.

      Workplace safety rules and regulations only apply to employees.

    • D.

      The Civil Rights Act prohibits discrimination only against employees.

    Correct Answer
    A. Employers need not pay payroll taxes on independent contractors.
    Explanation
    The correct answer is that employers need not pay payroll taxes on independent contractors. This is important because it can significantly impact the financial obligations of the employer. Payroll taxes, such as Social Security and Medicare taxes, are typically a significant expense for employers. By classifying workers as independent contractors, employers can avoid these payroll tax obligations, leading to potential cost savings. However, it is important for employers to properly classify workers according to the criteria set by the IRS to avoid legal and financial consequences.

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  • Current Version
  • Feb 14, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Feb 10, 2013
    Quiz Created by
    MarkowitzS
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