Use the following fact pattern: Sam Best is the sole owner of Best Buy Auto Center, Inc., a used-car business. Sam's hired assistants at Best Buy include three sales representatives, a mechanic, a receptionist, and the bookkeeper. In addition, Sam has engaged the services of a •janitorial maintenance company that sends its employees to Best Buy two evenings a week to clean the premises. Best Buy exercises considerable control over the details of the work and the day--to-day activities of the sales representatives, the methanic, the receptionist, and the bookkeeper. These workers are paid hourly wages, accumulated in paychecks issued on the first of every month. Federal and state taxes are withheld from the paychecks. Best Buy also pays unemployment taxes and the employer's share of Social Security taxes at the end of every three months for these workers. The janitorial company provides its own supplies, performs its tasks as it sees fit, and sends Best Buy an invoice each month for the services rendered during that month. The bookkeeper at Best Buy pays the bill; no taxes are withheld from the payment to the janitorial firm. Which of these workers---the sales representatives, the mechanic, the receptionist, the bookkeeper, and the janitors-are employees, and which, if any, are independent contractors? Explain.
Use the following fact pattern: Sam Best is the sole owner of Best Buy Auto Center, Inc., a used-car business. Sam's hired assistants at Best Buy include three sales representatives, a mechanic, a receptionist, and the bookkeeper. In addition, Sam has engaged the services of a •janitorial maintenance company that sends its employees to Best Buy two evenings a week to clean the premises. Best Buy exercises considerable control over the details of the work and the day--to-day activities of the sales representatives, the methanic, the receptionist, and the bookkeeper. These workers are paid hourly wages, accumulated in paychecks issued on the first of every month. Federal and state taxes are withheld from the paychecks. Best Buy also pays unemployment taxes and the employer's share of Social Security taxes at the end of every three months for these workers. The janitorial company provides its own supplies, performs its tasks as it sees fit, and sends Best Buy an invoice each month for the services rendered during that month. The bookkeeper at Best Buy pays the bill; no taxes are withheld from the payment to the janitorial firm. Which of these workers---the sales representatives, the mechanic, the receptionist, the bookkeeper, and the janitors-are employees, and which, if any, are independent contractors? Explain.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Transcribed Image Text:Use the following fact pattern:
Sam Best is the sole owner of Best Buy Auto Center, Inc., a used-car business. Sam's hired assistants at Best Buy include three sales representatives, a mechanic, a receptionist, and the bookkeeper. In addition, Sam has engaged the services of a janitorial maintenance company that sends its employees to Best Buy two evenings a week to clean the premises.
Best Buy exercises considerable control over the details of the work and the day-to-day activities of the sales representatives, the mechanic, the receptionist, and the bookkeeper. These workers are paid hourly wages, accumulated in paychecks issued on the first of every month. Federal and state taxes are withheld from the paychecks. Best Buy also pays unemployment taxes and the employer's share of Social Security taxes at the end of every three months for these workers. The janitorial company provides its own supplies, performs its tasks as it sees fit, and sends Best Buy an invoice each month for the services rendered during that month. The bookkeeper at Best Buy pays the bill; no taxes are withheld from the payment to the janitorial firm.
Which of these workers—the sales representatives, the mechanic, the receptionist, the bookkeeper, and the janitors—are employees, and which, if any, are independent contractors? Explain.
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