CCWP Worker Classification & Independent Contractor Compliance

Question 1

Which IRS test is most commonly used to determine whether a worker should be classified as an employee or an independent contractor?

Accepted Answer

The Common Law Control Test

Answer

The ABC Test

Answer

The Economic Realities Test

Answer

The Behavioral Integration Test

Question 2

Under the IRS three-category test, which of the following is considered a 'financial control' factor?

Accepted Answer

The worker can profit or incur a loss from the work

Answer

The worker follows set work hours

Answer

The worker receives training from the company

Answer

The worker uses company-provided tools

Question 3

Which IRS form must companies use to report payments of $600 or more to independent contractors in a tax year?

Accepted Answer

Form 1099-NEC

Answer

Form W-2

Answer

Form W-4

Answer

Form 1096

Question 4

What is co-employment risk in the context of contingent workforce management?

Accepted Answer

The risk that a company is found to share employer responsibilities with a staffing supplier

Answer

The risk that two staffing agencies claim the same worker

Answer

The risk of hiring too many contingent workers at once

Answer

The risk that contingent workers unionize alongside permanent staff

Question 5

The 'economic realities' test for worker classification is primarily applied by which federal agency?

Accepted Answer

Department of Labor (DOL)

Answer

Internal Revenue Service (IRS)

Answer

Equal Employment Opportunity Commission (EEOC)

Answer

National Labor Relations Board (NLRB)

Question 6

Which of the following factors most strongly indicates an employer-employee relationship under common law?

Accepted Answer

The company has the right to control not only the result but also how the work is performed

Answer

The worker sets their own hours and works from their own location

Answer

The worker provides their own tools and materials

Answer

The worker can freely work for multiple clients simultaneously

Question 7

What is the primary financial risk to a company that misclassifies employees as independent contractors?

Accepted Answer

Liability for back taxes, penalties, and unpaid benefits including Social Security and Medicare contributions

Answer

Loss of preferred vendor status with staffing agencies

Answer

Reduced access to talent pools

Answer

Increased recruiting costs for replacement workers