You have been hired as the new assistant manager of a U.S. flying school.

On the first day on the job, you learn that the school considers all of its flight instructors to be independent contractors. The instructors teach students assigned to them by the school, according to a schedule managed by the school, in school classrooms and school aircraft, and must precisely follow the school's lesson plans.

The school does not withhold payroll taxes or maintain workers' compensation or unemployment compensation insurance on the instructors. When you ask why, the general manager replies, "It helps us keep our prices down so we can compete with the other flight schools.

Why? Do you see a problem with that?"