law study guide.docx - Recognize define and give examples...

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Recognize, define, and give examples of an agency relationship. o o Employee agents are individual employees who are authorized to transact business on behalf of the employer principal. The employee agent has agreed to perform a specified service for the employer in exchange for pay. o An independent contractor agent is not considered an employee and has no legal protections of employees such as minimum-wage and overtime-compensation. Usually independent contractors are skilled in an area which allow them to freelance in their work. o Any agent that acts on behalf of principal without receiving compensation are referred to as gratuitous agents (320). Classify agents as either employees or independent contractors by applying the direction and control tests. o Although the parties themselves may agree to a certain classification the status of an agent is not based on what the parties agreed to but is instead determined by the actual working relationship between principal and agent. Courts applied the substance over form analysis to determine the classification of an agent. Fundamentally the agent is classified based on the amount of direction and control that the principal has already agent in terms of setting the agents work schedule and pay rate and determining the level of day-to-day supervision required. o In and employer employee agent relationship the employer principal typically sets work hours decides what salary to pay an exercise control over the employee agents working conditions and responsibilities. o Independent contractors usually work based on a deadline but typically choose their own schedule to accomplish that deadline. In terms of payment independent contractors usually send an invoice on a monthly basis sometimes longer for services rendered rather than drawling a weekly or by weekly paycheck. o Courts also use other criteria for determining the status of an agent that focuses on the nature of the agents duties. For example, an independent occupation or profession in which the agent has more than one customer or client as in the case of accountants and attorneys architects indicates an independent contractor. On the other hand if the principal provide stools are heavy equipment to the agent at the workplace, this generally indicates the agent is an employee. o Courts look to state common law and statutes for guidance in determining independent contractor status. Many states have adopted the ABC test in their agency statuses as a standard for determining agency status. Statuses that set out the
ABC factors typically create a presumption that the agent is an employee and less three tests are satisfied A the individual is free from direction and control, applicable both under contract for the performance award of service in a fact be the service is performed outside the usual course of business of the employer and see the individual is engaged in an independently establish trade, occupation, profession o

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