ESB ESB - Entrepreneurship and Small Business Human Resources and Team Building Questions and Answers 2 — Questions and Answers
Question 1: What is the key tax distinction between an employee and an independent contractor?
- Contractors must work on-site while employees can work remotely
- Employees have income and payroll taxes withheld by the employer; contractors pay their own self-employment taxes (Correct answer)
- Contractors always earn higher compensation than employees doing the same work
- Employees must sign non-compete agreements while contractors are exempt
Correct answer: Employees have income and payroll taxes withheld by the employer; contractors pay their own self-employment taxes
Employers withhold federal and state income taxes plus FICA for employees, while independent contractors receive full payment and manage their own tax obligations.
Question 2: What does FICA stand for in US payroll processing?
- Federal Income Contribution Act
- Federal Insurance Contributions Act (Correct answer)
- Financial Investment and Compliance Agreement
- Federal Individual Compensation Authorization
Correct answer: Federal Insurance Contributions Act
FICA (Federal Insurance Contributions Act) requires both employers and employees to contribute equal percentages to Social Security and Medicare programs.
Question 3: Which of the following interview questions is ILLEGAL to ask a job applicant under US law?
- What relevant skills and experience do you have for this role?
- Can you describe your most recent work accomplishments?
- Are you planning to have children or get married in the near future? (Correct answer)
- What are your salary expectations for this position?
Correct answer: Are you planning to have children or get married in the near future?
Asking about family planning or marital status violates anti-discrimination laws because it may lead to hiring decisions based on sex or family status.
Question 4: What is the current federal minimum wage in the United States?
- $5.15 per hour
- $7.25 per hour (Correct answer)
- $10.10 per hour
- $15.00 per hour
Correct answer: $7.25 per hour
The federal minimum wage is $7.25 per hour, though many states and cities have enacted higher minimum wages that supersede this floor.
Question 5: What is a non-compete agreement in employment law?
- A contract requiring equal pay for employees performing equal work
- A policy preventing managers from hiring their own family members
- A contract restricting an employee's ability to work for competitors after leaving (Correct answer)
- An agreement between businesses not to actively recruit each other's employees
Correct answer: A contract restricting an employee's ability to work for competitors after leaving
A non-compete agreement limits a former employee's ability to join competing companies or start a competing business for a defined time period and geography.
Question 6: What does PTO stand for in the context of employee benefits?
- Part-Time Operations scheduling system
- Paid Time Off bank of leave hours (Correct answer)
- Pre-Tax Options for benefit deductions
- Personnel Training and Onboarding overview
Correct answer: Paid Time Off bank of leave hours
PTO (Paid Time Off) combines vacation, sick leave, and personal days into a single pool of hours employees can use while still receiving pay.
ESB ESB - Entrepreneurship and Small Business Human Resources and Team Building Questions and Answers 2
What is the key tax distinction between an employee and an independent contractor?