State RegulationsMI specificDifficulty 3/5
A Traverse City owner operates 3 related businesses under common ownership — a restaurant, a bakery, and a catering service — each employing 15 full-time-equivalent employees. For purposes of Michigan's small-employer definition, how are these businesses counted?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
M.C.L. 500.3701(q) treats affiliated persons as 1 employer for small-employer purposes, so headcounts under common ownership are aggregated rather than assessed business by business. Combining the 3 affiliates yields a count of 45 full-time-equivalent employees, still within the 1 to 50 range, but the aggregation rule — not the split into separate entities — is the governing principle.
Why the other options are wrong
- A) Common ownership defeats the split; affiliated persons are aggregated as one employer under M.C.L. 500.3701(q).
- C) Affiliation does not disqualify the group; it merely changes how the headcount is aggregated.
- D) No employee agreement affects the affiliated-persons counting rule.
Memory hook
Same owner, one employer — add the headcounts together.