Exam 2 Review Flashcards
Independent Contractor
A person who performs work for pay, but does so under circumstances that satisfy the relevant tests (economic reality test) for distinguishing them from employees
Economic Reality Test
an approach used by courts to distinguish between employees and independent contractors, that focuses on the questions of wether persons performing work are in business for themselves
Economic Reality Test Criteria:
- Who has the right to control how, when, and where, the work is done?
- Who provides the tools, materials, and other resources needed for the work to be performed? (degree of investment in the business)
- Does the method of payment afford an opportunity for profit or loss, depending on how well the work is managed?
-What is the duration (permanence and regularity) of the working relationship?
-Does the work require some type of special skill?
-How integral to the business of the hiring party is the work that is being performed?
Common Law Test
a widely used method for determining whether workers are employees or independent contractors; it emphasizes the issue of the right of control
Common Law Test Factors:
- The extend of the hiring party’s right to control the manner and means by which the work is done
-The level of skill required
- The source of necessary tools and materials
- The location of the work
-The duration of the work
-The extent of the hiring party’s right to assign additional projects to the hired party
-The extent of the hired party’s discretion over when and how long to work
-The method of payment
-The hired party’s role is in hiring and paying assistants
-The extend to which is part of the regular business of the hiring party
-Whether the hiring party is in business
-Whether benefits of any kind are provided to the hired party
-The tax treatment of the hired party
Right-to-control
examines the extent of the hiring party’s authority to control where, when, and how the work gets done
ABC Test
Workers are employees unless the party for whom they are performing work can prove all of the following:
(A) the work is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact
(B) that the worker performs work that is outside the usual course of the hiring entity’s business
(C) the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed
Temporary Workers
employees who generally work for a short period of time for particular employers and who employers make efforts to clearly differentiate from permanent employees
Primary Beneficiary Test
set of criteria used to determine whether unpaid internships are lawful under the FLSA, focusing on whether the intern or alleged employer is the main beneficiary of the learning experience and the extent to which the internship is tied to a college program
Volunteer
an individual who, without coercion, performs hours of service for a public agency for civic, charitable, or humanitarian reasons, without promise, expectation, or receipt of significant compensation for services rendered
Partners
An individual who is not an employee protected by employment laws because they personify the business and function as a principal rather than an agent
Agency
Employers are legally responsible for the actions of their employees
The argument that employers were not aware of the employee’s actions or the employee’s actions were against company policy will not save them from liability
Scope of Employment
actions performed by employees that are related to the kind of work they were hired to perform; take place substantially within the workplace during work hours; and are intended to serve, at leat partially, the interests of the employer
Fair Labor Standards Act (FLSA)
the principal federal statue regulating wages and hours including minimum wage, overtime pay, and child labor requirements
Minimum Wage
Under the FLSA, this is the lowest wage that employers are permitted to pay most employees for each hour of work in a workweek. ($7.25)
State wage and hour laws also establish minimum wages in most states and these are often higher than the federal minimum wage
Tipped Employees
Under the FLSA, these are employees who customarily and regularly receive at least $30 per month in tips and who can be paid a sub-minimum wage of $2.13 per hour, provided that certain other conditions are met
Overtime
Under the FLSA, these are work hours in excess of 40 in a workweek and for which non-exempt employees are entitled to premium overtime pay
(Time and a half)
Comp Time
The practice, under the FLSA is allowed for public sector employers only, of paying for overtime work with compensatory time off rather than overtime pay
record of wages paid and hours worked must be kept for at least three years
Compensable Time
Time for which non-exempt employees must be paid under the FLSA
Exempt Employee
an employee for whom employers do not have to follow some or all FLSA requirements
Non-exempt Employees
an employee entitled to the protections of the FLSA, including the minimum wage and overtime pay
White-collar Exemptions
under the FLSA, these are exemptions for employers from having to meet FLSA requirements (particularly overtime pay) for executive, administrative, and professional employees
Executive Employee
one of the “white-collar” groups exempt from FLSA requirements, these are employees who manage some part of a company and who meet other duties and salary test criteria
Administrative Employee
One of the “white collar” groups exempt from FLSA requirements, these are employees who perform non-manual work related to the operation of the business and who meet other duties and salary test criteria.
Professional Employee
One of the “white collar” groups exempt from FLSA requirements, these are employees who perform work requiring advanced knowledge or that is original and creative in nature, and whose jobs meet other duties and salary test requirements.
Duties Test
Criteria used to ascertain whether an employee’s duties are executive, administrative, or professional in nature, as part of determining whether they are exempt employees under the FLSA.
Salary Basis Test
Determination made by the DOL as to whether employees are genuinely paid on a salary basis.
Highly Compensated Employee
White-collar employees who earn salaries above a specified level are considered exempt from FLSA requirements if they also meet a less stringent duties test.
Primary Duties
Duties that are the focus of the duties tests used to identify exempt white-collar employees under the FLSA. In general, these are duties that are relatively important to the employer, performed independently, and that (usually) consume most of an employee’s work time.
