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MCLE Test and Answer Sheet

Test No.98: By Any Other Name (September 2001 LA Lawyer)

Instructions for Obtaining MCLE Credits

1.Study the CLE article in this issue.

2.Answer the test questions by marking the appropriate boxes. Each question has only one answer. Photocopies of this answer sheet may be submitted; however, this form should not be enlarged or reduced.

3.Mail the answer sheet and the $15 testing fee ($20 for non-LACBA members) to:
Los Angeles Lawyer
P.O. Box 55020
Los Angeles, CA 90055
Make checks payable to Los Angeles Lawyer.

4.You can also fill in the test form and submit it directly to LACBA by clicking "Submit." To submit your test answers online you will need to pay by credit card. After submitting your answers you will be presented with a screen requesting payment information. This information will be submitted in a secure mode which will allow you to safely transmit your credit card number over the Internet. If you prefer not to pay by credit card, please print this answer sheet and submit your responses by regular mail.

5.Within six weeks, Los Angeles Lawyer will return your test with the correct answers, a rationale for the correct answers, and a certificate verifying the CLE credit you earned through this self-assessment activity.

6.For future reference, please retain the CLE test materials returned to you.
Test Sheet

Mark your answers to the test by clicking next to your choice. Each question has only one answer. This test is worth 1 hour of credit.*

1. Employers may charge an employee for any loss the employee causes through his or her negligence.

2. An independent contractor who applies for a position as an employee is protected under the Fair Employment and Housing Act.

3. The best way to establish that a worker is an independent contractor is through a detailed written agreement.

4. While the penalties that the Internal Revenue Service and the Franchise Tax Board may impose are significant, an employer who hires an employee and then incorrectly categorizes that worker as an independent contractor may face far harsher civil penalties in a lawsuit by the miscategorized worker for employee benefits.

5. Which of the following is not a precondition necessary for a hirer to invoke Revenue Procedure 85-18, which prevents the IRS from reclassifying a worker?
A. The worker must have filed all required tax returns.
B. Other workers in the industry must have been categorized in the same way as the allegedly misclassified worker.
C. The hirer must have categorized in the same way all workers holding a position similar to the allegedly misclassified worker.
D. The hirer must have had a reasonable basis for classifying the worker as an independent contractor.

6. The California common law test to determine whether a worker is an employee:
A. Applies rigid categories of inquiry of equal weight.
B. Focuses on the remedial purposes of the legislation at issue to determine which categories of inquiry to apply.
C. Is a hybrid of the Borello test and the IRS 20-factor test.
D. Focuses on the degree of control the hirer exercises over the details of the worker's tasks.

7. The common law test to determine whether a worker is an employee was developed primarily to determine whether a hirer sufficiently controlled a worker's activities to make it fair to apply tort liability to the hirer for the worker's actions.

Hypothetical 1
A farmer prepares his field and plants and grows his crop up to the time of harvest. The crop must be harvested by hand. He wants to lower his labor costs, so he subdivides his field and enters into contracts with independent contractors. The farmer leaves the harvesting time and methods exclusively to the independent contractors, who in turn hire their own workers to harvest the crop. The farmer supplies 1) pricing guidelines to ensure the highest market price for the crop, 2) boxes into which the crops are placed, and 3) services transporting the harvest to market.

8. Which test will a court apply to determine whether the workers harvesting the crop are independent contractors or the farmer's employees?
A. The common law test.
B. The economic realities test.
C. The Borello test.
D. The information supplied is insufficient to determine which test a court will apply. The test used will depend upon the issue before the court.

9. Which fact would be most helpful in establishing that an employment relationship existed according to the common law test?
A. The workers used their own tools.
B. The workers used their own transportation to work in as many as three separate fields a day.
C. The farmer hired forepersons to monitor the harvesting in each subdivision and to consult on increasing efficiency.
D. The workers carried their own workers' compensation coverage.

10. One of the field workers is injured when a bushel of produce falls on his toe. The worker files a workers' compensation claim against the farmer. Which test for employment will a court apply?
A. The common law test.
B. The Borello test.
C. The IRS 20-factor test.
D. None of the above.

11. The Borello test emerged to:
A. Provide statutory protection to workers who might lose that protection because they are deemed independent contractors.
B. Transcend the rigid limitations of the common law test.
C. Both A and B.
D. None of the above.

12. Courts never consider the parties' written agreements when determining a worker's proper status.

13. The economic realities test is applied exclusively in the federal context for determining the reach of such federal legislation as the Fair Labor Standards Act, the Occupational Safety and Health Act, and federal antidiscrimination legislation such as Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act.

14. Which of the following is not a reason to hire independent contractors over employees?
A. Hiring independent contractors gives the hirer greater control over the way a job is performed.
B. Hiring independent contractors can reduce labor costs such as supervision expenses and workers' compensation premiums.
C. Hiring independent contractors protects the hirer from tort liability for the negligence of an independent contractor.
D. Cost overruns are factored directly into the fee a hirer pays an independent contractor.

15. If the IRS deems that a worker identified as an independent contractor has been misclassified, an employer is not entitled to an offset for tax payments the worker may have made before the IRS's reclassification. Thus the IRS can collect FICA payments twice-from both the worker and the hirer.

16. If the IRS reclassifies workers, what can the employer show to obtain some relief from reclassification penalties?
A. A history of misclassification for which no prior IRS investigation has occurred.
B. The employer misclassified the worker with the worker's permission.
C. The misclassification was unintentional.
D. All of the above.

17. Which of the following are contingent workers?
A. Temporary help.
B. Leased workers under the leasing agency's supervision.
C. Workers in a managed services situation.
D. All of the above.

Hypothetical 2
Worker is a salesman for Company. He makes his own hours, obtains leads through Company and from sources he generates, decides how to present the products he sells to potential buyers, establishes his own vacation schedule, uses his own car, and operates under a written independent contractor agreement with Company. Under the agreement, Worker sells only Company's products. Company provides Worker with an office, telephone, secretary, stationery, and business cards. Company also sets the prices for the products sold and reimburses Worker for his expenses.

18. Driving to a sales meeting, Worker hits a pedestrian in a crosswalk. The pedestrian sues Company. Which test will the court apply to determine whether Company is liable?
A. The common law test.
B. The economic realities test.
C. The Borello test.
D. None of the above.

19. Worker sues for discrimination under Title VII. Which of the following facts should a court consider if it applies the economic realities test?
A. Company supervised Worker's sales presentations.
B. Worker performs services exclusively for Company.
C. Worker is economically dependent upon Company.
D. All of the above.

20. Under the economic realities test, what evidence will help to establish an employment relationship?
A. Worker sells only Company's products.
B. Company provides Worker with an office, supplies, and support staff.
C. Company pays Worker's expenses.
D. All of the above.

Address and Billing
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If you do not wish to complete this transaction over the Internet you should print this page and send it to the address listed in Step 3 of the instructions at the top of this page.

*The Los Angeles County Bar Association has been approved as a continuing legal education provider of Minimum Continuing Legal Education credit by The State Bar of California. This self-assessment activity will qualify for Minimum Continuing Legal Education credit by The State Bar of California in the amount of one hour.
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