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. How does this classification affect the responsibilities of the employer when it concerns liability? Explain your answer.

Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
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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.
How does this classification affect the responsibilities of the employer when it concerns
liability? Explain your answer.
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. How does this classification affect the responsibilities of the employer when it concerns liability? Explain your answer.
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