1. What does the U.S. Constitution accomplish?
A. It eliminates inefficient employment relationships.
B. It mandates the doctrine of respondeat superior.
C. It divides power between the branches of government. Correct
D. It establishes the master/servant relationship in employment law.
Explanation
The U.S. Constitution establishes the structure of the federal government and divides power among the legislative, executive, and judicial branches through separation of powers and checks and balances. Employment relationships, respondeat superior, and master/servant concepts are governed by state common law and statutes, not the Constitution. Therefore, only option C correctly identifies a core constitutional function.
2. What is the meaning of precedent in the common law system?
A. An act passed by a legislature
B. A type of contractual relationship
C. A controlling court decision Correct
D. The supreme law of the land
Explanation
In the common law system, precedent (stare decisis) means that prior court decisions from higher courts are binding or highly persuasive on similar future cases. Statutes are legislative acts, contracts are private agreements, and the Constitution is the supreme law, not court decisions. Thus, C is the correct definition.
3. A CPA works for a public accounting firm only during tax season. The firm allows the CPA total control over the work schedule and performance. Which employment relationship is described?
A. At-will employee
B. Common law agent
C. Independent contractor Correct
D. Temporary employee
Explanation
The key factors are the high degree of control the CPA exercises over schedule and performance with no ongoing expectation of work outside tax season, which are classic hallmarks of an independent contractor rather than an employee. At-will and temporary employees are still employees subject to greater employer control, and a common law agent typically acts on behalf of a principal with less independence. Therefore, the relationship is independent contractor.
4. Which doctrine is likely to be included in an employee handbook?
A. Respondeat superior
B. The implied covenant of good faith
C. Statute of frauds
D. Employment-at-will Correct
Explanation
Employee handbooks routinely contain a clear statement preserving the employer's right to terminate employment at will for any lawful reason, often with a disclaimer to prevent the handbook itself from creating an implied contract. Respondeat superior and statute of frauds are legal liability doctrines not typically addressed to employees, and the implied covenant of good faith is a judicial exception in some states, not a standard handbook provision.
5. Which question is part of the IRS 20-Factor Analysis for determining whether a worker is an employee or an independent contractor?
A. How much training does the employer give? Correct
B. Does the employer register with the IRS?
C. Must the employee conform to strict standards of dress?
D. Is the employer subject to wage laws?
Explanation
The IRS 20-Factor Test heavily weighs behavioral and financial control; the amount and type of training provided by the payer is a specific factor because requiring significant training indicates employee status. Dress codes can be relevant but are not one of the official 20 factors, and the other options are not part of the analysis at all.