Question

ABC Co. is preparing to hire five new workers. It wishes to designate them as independent contractors rather than employees. Which of the following reasons might explain that choice?

A. ABC would not be liable under Title VII if any of them were sexually harassed by an ABC manager.
B. ABC would not have to pay FUTA taxes on these employees.
C. ABC would likely not be liable to a third party if one of the new workers carelessly injured him or her.
D. All of the above.

Answer 1

ABC Co. may choose to designate the new workers as independent contractors rather than employees for various reasons, including avoiding liability under certain laws and reducing tax obligations.

Step-by-step explanation:

ABC Co. may choose to designate the new workers as independent contractors rather than employees for various reasons. One reason is that by doing so, ABC would not be liable under Title VII if any of them were sexually harassed by an ABC manager.

Another reason is that ABC would not have to pay FUTA taxes on these workers as independent contractors. Additionally, by designating the workers as independent contractors, ABC would likely not be liable to a third party if one of the new workers carelessly injured themselves or others.

Therefore, the correct answer is D. All of the above reasons might explain ABC's choice to hire the new workers as independent contractors.