FPC Exam - CORE PAYROLL CONCEPTS
What is an Employee? correct answer Anyone who performs services for an employer when the
employer controls what work is done and how it is accomplished.
What is a Common-Law Employee? correct answer Gives employers guidelines to determine whether an
individual is an employee or independent contractor. Done by examining the business and worker, the
level of control each has in how work is done and where.
What is an Independent Contractor? correct answer An individual who has control how the work is
done. The "payer" merely assigns a task but has little control over how it is done.
What is a Statutory Employee? correct answer Workers come under common law rules and are
independent contractors by statute for employment tax purposes if they fall within any one of several
categories: 1) Drivers delivering laundry, product, baked goods, beverages (NOT MILK) if the driver is
paid on commission. 2) life insurance sales agent who works full time and whose main business is selling
life insurance. 3) an individual who works at home on employer supplied goods on work that must be
returned to employer.
What is a Statutory Non-Employee? correct answer these employees fall under two categories: either
real estate agents and direct sellers. These are viewed as self employed if: 1) all payments for their
services are directly related to sales instead of working a certain number of hours. 2) a written contract
guides what services they perform and specifies that for tax purposes they will not be treated as
employees.
What are Temporary Help Services and Personnel? correct answer Employees hired through an agency
on a temporary status.
What factors should be considered before hiring a temporary employee service? correct answer 1) how
are personnel being tested or evaluated? 2) The firm with the most skilled employees is likely to have an
aggressive recruitment system. 3) Does the service have a solid track record and financial stability? 4) Is
the quality of work by the temporary employee checked? 5) Are temps trained with specific skill?
In determining legal obligations with respect to workplace discrimination, an individual would be
considered an employee of both the staffing agency and the agency's client to which he's assigned
when... correct answer the staffing agency is a temporary employment agency.
