The Department of Labor Has Conducted an Investigation of Home

question 32

Multiple Choice

The Department of Labor has conducted an investigation of home builders and found that those who are building homes for several of the nation's largest homebuilders are treated as independent contractors.  That is, the builders do not pay wage taxes, unemployment taxes, or withhold Social Security or income tax payments from their paychecks.  However, the builders dictate the hours of work, the amount of work, and the location of the work as well as the time for their breaks.​ Which of the following statements is correct?​

• A)The construction workers on the homes are independent contractors.
• B)The construction workers on the homes are not agents of the builders.
• C)The construction workers are, in effect, employees of the builders.
• D)The construction workers are temporary help and the builders do not owe any wage taxes as a result.

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Definitions:

Adjustment Costs

Expenses incurred in the process of modifying a business operation or strategy, including restructuring or equipment changes.

Transaction Motive

The need to hold cash for the purpose of conducting day-to-day business operations.

Float Management

The practice of managing the time difference between the writing of a check and its clearing at the bank, aiming to optimize the use of available funds.

Small Firm

A business with a limited number of employees and revenue, often defined within specific legal frameworks based on the industry.