You Started Your Own Business 2 Years Ago, and Needed

question 10

Multiple Choice

You started your own business 2 years ago, and needed several part-time workers, but did not want and could not afford to pay them a minimum wage, or payroll taxes, so you classified them as independent contractors. At the time, a decent argument could be made that they were independent contractors, as there had been no rulings on your particular arrangement. Recently, for a business very similar to yours, the Department of Labor ruled that the workers of the business were employees, and not independent contractors. What should you do? ​

• A)nothing, unless the Department of Labor challenges your arrangement
• B)nothing, unless one of the workers complains
• C)have all of the workers sign independent contractor agreements immediately
• D)begin to treat them as employees, including paying a minimum wage, and withholding income taxes

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Definitions:

Raw Materials

Basic materials that are used in the production process to manufacture goods.

Finished Unit

A product that has completed all stages of production and is ready for sale to consumers.

Cash Disbursements

Payments made in cash by a business during a period of time.

Raw Materials Purchases

The total cost of raw materials bought by a company for production purposes during a specific time frame.