Worker Classification & ABC Test Flashcards
7 cards from real CPM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Worker Classification & ABC Test flashcards as text
Under California's ABC test (AB5), which prong requires that the worker perform work outside the usual course of the hiring entity's business?
Answer: Prong B
Prong B of California's ABC test requires that the worker perform work outside the usual course of the hiring entity's business.
A company hires a graphic designer exclusively for one client project. Under the economic realities test, which factor weighs MOST toward employee status?
Answer: The work is integral to the company's business
When the work performed is integral to the hiring entity's primary business operations, it weighs heavily toward employee status under the economic realities test.
Which IRS publication provides the most comprehensive guidance on employee vs. independent contractor classification?
Answer: Publication 1779 (Independent Contractor or Employee)
IRS Publication 1779 is specifically dedicated to explaining the distinction between independent contractors and employees.
A worker passes Prong A and Prong C of the ABC test but fails Prong B. What is their classification?
Answer: Employee because all three prongs must be satisfied for contractor status
All three prongs of the ABC test must be satisfied for a worker to be classified as an independent contractor; failing any single prong results in employee status.
Under the FLSA economic realities test, the degree of the worker's investment in equipment and facilities is examined primarily to assess:
Answer: Whether the worker is economically dependent on the employer
Investment in equipment and facilities helps determine whether the worker is truly economically independent or dependent on the hiring entity, which is the central inquiry of the FLSA economic realities test.
Which of the following workers is most likely to qualify as an independent contractor under the ABC test?
Answer: A licensed electrician who performs residential wiring for multiple homebuilders
A licensed electrician working for multiple clients in a trade outside the usual course of those clients' businesses satisfies the ABC test's prongs for contractor status.
When a state uses the 'suffer or permit to work' standard for worker classification, which statutory framework does it most closely align with?
Answer: FLSA economic realities test
The 'suffer or permit to work' standard originates from the FLSA and is used in the economic realities test applied under federal and many state wage-and-hour laws.