ACC 150 - Chapter 2

Question 1

Employer Paid Employee Payroll Taxes

Answer 1

• Social Security Tax
• Medicare Tax
• Federal Unemployment Tax
• State Unemployment Tax
• Workers’ Compensation Insurance Premiums

Question 2

Partners and Sole Proprietors

Answer 2

• Not employees
• Considered self-employed
• Not covered under workers compensation or unemployment insurance programs
• Must pay double social security and medicare taxes (employer and employee)

Question 3

Statutory Employee

Answer 3

• Workers who qualify as independent contractors under common law
• Taxed as employees for social security
• Applies to agent or commission drivers, industrial home workers, full-time life insurance agents, and full-time traveling or city sales people

Question 4

Statutory Non-Employee

Answer 4

-Considered to be self-employed for federal tax purposes as long as their earnings are based on the amount of sales and their services are performed under a written contract stating that they will not be treated as an employee for federal tax purposes

Question 5

Tipped Employees

Answer 5

• Must take home at least minimum wage
• Employer must pay a minimum of $2.13 an hour
  
  • -Used for withholding social security, Medicare, and federal and state income taxes
• Employer must pay an additional amount if the employees take home pay does not equal minimum wage
• Employer must match social security and Medicare on ALL wages the employee makes
• Minimum wage for overtime pay is $5.76 per hour

Question 6

Overtime Wages

Answer 6

• Non-exempt employees are eligible for overtime pay for hours PHYSICALLY worked over 40 in a workweek
• Sick or annual leave (paid or unpaid) cannot count in determining which hours will be paid at the overtime rate

Question 7

Job Titles Exempt from Overtime Pay

Answer 7

• Executives
• Administrative
• Professional
• Business Owner
• Highly Compensated
• Computer Professionals
• Creative Professionals
• Outside Salespeople

Question 8

Compensatory Time

Answer 8

• Comp Time

- Employers must give the employee 1.5 hours of time off for every overtime hour worked

Question 9

2 Categories of Statutory Non-employees

Answer 9

1. Direct sellers

2. Licensed Real Estate Agents