NASCLA Labor Laws and Employment Practices 1 — Questions and Answers
Question 1: Under IRS guidelines, which factor is MOST important in determining whether a worker is an employee or independent contractor?
- The number of hours worked per week
- The degree of behavioral and financial control the hiring party has over the worker (Correct answer)
- Whether the worker has their own business license
- The total amount paid to the worker per year
Correct answer: The degree of behavioral and financial control the hiring party has over the worker
The IRS uses behavioral control, financial control, and type of relationship to classify workers, with the level of control being the primary determinant.
Question 2: What form must employers use to verify an employee's eligibility to work in the United States?
- W-4
- W-9
- I-9 (Correct answer)
- 1099-NEC
Correct answer: I-9
The I-9 Employment Eligibility Verification form must be completed for all new hires to verify their identity and authorization to work in the U.S.
Question 3: The Fair Labor Standards Act (FLSA) requires that non-exempt employees be paid overtime at what rate for hours worked over 40 in a workweek?
- 1.25 times the regular rate
- 1.5 times the regular rate (Correct answer)
- 2 times the regular rate
- 1.75 times the regular rate
Correct answer: 1.5 times the regular rate
The FLSA mandates time-and-a-half (1.5×) the regular rate of pay for all hours worked beyond 40 in a single workweek for non-exempt employees.
Question 4: Which federal tax form do employers use to report annual wages paid and taxes withheld for each employee?
- Form 1099-MISC
- Form W-2 (Correct answer)
- Form W-9
- Form 1040
Correct answer: Form W-2
Employers must provide each employee with a W-2 form showing annual wages earned and all taxes withheld, which employees use to file their income tax returns.
Question 5: How long must employers retain completed I-9 forms for a terminated employee?
- 1 year after termination or 3 years after date of hire, whichever is later (Correct answer)
- 2 years after the date of termination
- Until the employee's next employer requests the records
- 5 years after the date of hire regardless of termination
Correct answer: 1 year after termination or 3 years after date of hire, whichever is later
Federal law requires I-9 retention for 3 years from the date of hire OR 1 year after termination, whichever date is later.
Question 6: Under the Federal Insurance Contributions Act (FICA), what percentage of an employee's wages is withheld for Social Security tax up to the annual wage base limit?
- 4.2%
- 6.2% (Correct answer)
- 7.65%
- 12.4%
Correct answer: 6.2%
The Social Security tax rate is 6.2% on employee wages up to the annual wage base; the employer must match this amount with an equal contribution.
Question 7: Which law prohibits employers from discriminating against employees or applicants based on race, color, religion, sex, or national origin?
- Americans with Disabilities Act (ADA)
- Age Discrimination in Employment Act (ADEA)
- Title VII of the Civil Rights Act of 1964 (Correct answer)
- Family and Medical Leave Act (FMLA)
Correct answer: Title VII of the Civil Rights Act of 1964
Title VII of the Civil Rights Act of 1964 is the primary federal law prohibiting employment discrimination based on race, color, religion, sex, or national origin.
NASCLA Labor Laws and Employment Practices 1
Under IRS guidelines, which factor is MOST important in determining whether a worker is an employee or independent contractor?