Chapter 1 Flashcards by Heather Hamilton

How long to keep I-9 Forms

Retain for 3 years form date of hire or 1 year from termination, whichever is LATER

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When should an I-9 be filled out

Employee must complete section 1 by 1st day of work

With in 3 business days the 1st day of work, the employer reviews and completes Section 2.

When reverifying, employer completes Section 3

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A nonexempt employee is paid $9.50 per hour and
recorded the following hours:
Sun Mon Tues Wed Thurs Fri Sat
0 (sick) 10 8 8 8 0
Company policy allows pay for sick days at 8 hours per
day. Under the FLSA, calculate the employee’s gross
weekly pay.
A. $323.00
B. $399.00
C. $408.50
D. $418.00

B. $399.00

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What types of wages are excluded when calculating the
regular rate?
A. Production bonus.
B. Shift differential.
C. Paid time not worked.
D. Premium pay less than one and one-half times the
base rate.

C. Paid time not worked.

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Child Labor Restrictions

Under 14- Generally forbidden from working, except family farms

14 and 15- food service, bag and carry out, office and clerical, cashier, clean-up
work hours:
In school: 7am-7pm 3 hours per day 18 hours per week
Out of School: 7am -9pm No more than 8 hours per day, 40 hours per week

16 and 17- Any with the exception of hazardous jobs no hour limitations

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Penalties for failure to pay minimum wage and/or overtime

Recovery of back wages & equal damages
Repeated willful violations up to $2,203 per violation

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Federal minimum wage

$7.25 per hour
Opportunity wage $4.25 first 90 calendar day just learning and under 20

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Penalties Child Labor

up to $14,050 per employee subject to violation
$63,855 if death or serious injury
Repeated willful violations up to $127,710 per Violation

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Minimum wage federal vs. State

When differ employer must follow the law that is more favorable to the employee. (usually state)

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Shift premiums

No federal or state requirements
must be included in regular rate of pay (Gifts, Vac and holidays not included in regular rate of pay.

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What is the first rule of crisis management?

Be proactive

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When developing plans to manage a crisis, what scenario is planned for?

The worse case scenario

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In the middle of a crisis, what approach should be taken to resolve it?

A. Be as positive or negative as you need to be with staff to let them know what you are thinking

B Identify the problem and analyze the situation for multiple solutions

C. Keep communication with impacted personnel to a minimum until the crisis is over

D. Remain in your office and away form your staff so others know where to find you.

B Identify the problem and analyze the situation for multiple solutions

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What steps should be taken after a crisis has passed?

List the problems that surfaced, determine which issues where preventable, list issues not resolved
Meet with the crisis team to discuss the crisis, create a trauma file, itemize the successes achieved.

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T/F- The IT department’s disaster recovery plan should be kept separate form a business continuity plan so each area of an organization can recover form a disaster independently.

False

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When would a business continuity plan be implemented?

With any disruption of business activities.

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What should be developed to plan for recovery form a business interruption?

A list of the staff and tools required to each day of the recovery.

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How frequently should the plan be updated?

The plan should be updated after each test and when processes change

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Which of the following aims to test a business continuity plan most thoroughly?
A. Functional testing
B. Full-scale testing
C. Tabletop testing
D. Walk-through testing

B. Full-scale testing

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T/F - an employer using E-Verify is not required to use form I-9

False-
I-9 form is mandatory

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T/F - An employee must provide an employer that participates in the E-Verify system with a social security number on Form I-9

True
E-Verify requires a SSN so employee must provide.
If only I-9 not required.

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Federal Minimum wage

$7.25

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work week has to be

168 fixed hours (7 day period)

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What min for Exempt employees per week

$684 per week

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Yes/No Arnold works 40 hours per week at $8 an hour. In the last workweek, Arnold missed 4 hours of work. The employer docked his pay and Arnold received total wages of $288 for that workweek. Did the employer violate the FLSA?

What taxes, if any, must be withheld from an employee’s pay? ❑ a. Federal income, social security and Medicare ❑ b. Federal income only ❑ c. Social security and Medicare only ❑ d. No taxes are withheld

a. Federal income, social security and Medicare

What taxes, if any, must be withheld from an independent contractor’s pay who provides a TIN? ❑ a. Federal income, social security and Medicare ❑ b. Federal income only ❑ c. Social security and Medicare only ❑ d. No taxes are withheld

d. No taxes are withheld

Who has the responsibility to determine if the worker is an employee or independent contractor? ❑ a. Hiring entity ❑ b. Social Security Administration ❑ c. Worker ❑ d. Internal Revenue Service

a. Hiring entity

Prior to beginning work for a company, a chemical engineer signed a contract stating that she agreed to work as an independent contractor. She performs all her duties in the company’s laboratories, where she has full access to the company’s testing equipment. She works under the company’s direction and maintains regular office hours. What is her status? ❑ a. Independent contractor under common law ❑ b. Independent contractor under the reasonable basis test ❑ c. Employee

c. Employee

A retired safety inspector for the company was rehired as a consultant when the company expanded its plant operations. The retired employee was a natural choice. The tasks he undertook as a consultant were the same as the ones he performed before retirement. Paid monthly, he has agreed to work under the direction of his old boss until the new plant facilities are fully operational. What is his status? ❑ a. Independent contractor under common law ❑ b. Independent contractor under the reasonable basis test ❑ c. Employee

c. Employee

A receptionist has agreed to work afternoons at the company until the company can find a full-time replacement. What is the receptionist’s status? ❑ a. Independent contractor under common law ❑ b. Independent contractor under the reasonable basis test ❑ c. Employee

c. Employee

What are exempt employees exempt from? ❑ a. Minimum wage only ❑ b. Overtime pay only ❑ c. Minimum wage and overtime ❑ d. Pay for time off

c. Minimum wage and overtime

All of the following types of employees are classified as exempt from the FLSA’s minimum wage and overtime requirements except: ❑ a. Professional ❑ b. Outside salesperson ❑ c. Administrative ❑ d. Computer repairman

d. Computer repairman

A waitress is paid $2.25 per hour, and she receives $225.00 in tips during the week. She works 40 hours per week. Which of the following is true? ❑ a. Her employer is allowed to reduce her cash wage to no less than $2.13 per hour. ❑ b. Her base pay must be increased to $4.25 per hour after a 90- day training period. ❑ c. She must be paid $5.12 per hour by her employer. ❑ d. Her base salary must be raised to $3.00 per hour to comply with federal minimum wage requirements.

a. Her employer is allowed to reduce her cash wage to no less than $2.13 per hour.

A nonexempt employee works in a state with a minimum wage of $7.35 per hour, while living in a state with a minimum wage of $10.25. What is the minimum rate he must be paid? ❑ a. $7.25 per hour ❑ b. $7.35 per hour ❑ c. $10.25 per hour ❑ d. There is no minimum because the employee is exempt.

b. $7.35 per hour

If a state sets the minimum wage at a rate greater than the federal minimum wage the state minimum wage must be paid to workers in that state. ❑ True ❑ False

True

Tips can be counted toward the employee’s minimum wage. ❑ True ❑ False

True

An employee works 40 hours per week as a fry cook. During the week, she substitutes for one of the waitresses and reports $15.00 per week in tips. Can her employer pay her $2.13 per hour? ❑ Yes ❑ No

Employers who provide paid vacation leave must count the hours of paid time off when determining if the employee must receive an overtime premium when the total hours worked in a week exceed 40. ❑ True ❑ False

False

The FLSA requires immediate payment of an employee’s final paycheck upon termination. ❑ a. True ❑ b. False

False

The FLSA requires that time worked on Saturday be paid at overtime rates and time worked on Sunday be paid at double time rates. ❑ True ❑ False

False

If a state wage and hour law requires that a nonexempt employee be paid an overtime premium when the employee works more than 8 hours in a day and the employee works the following schedule, how many overtime hours must the employee be paid? Sun Mon Tue Wed Thur Fri Sat 5 7 6 8 10 8 6 ❑ a. 0 ❑ b. 2 ❑ c. 10 ❑ d. 14

c. 10

Last week a high school teacher spent 40 hours in the classroom, worked 10 hours grading papers and was required to put in another 8 hours on Saturday at the school-sponsored science fair. Under the FLSA, what overtime hours, if any, must the teacher be paid? ❑ a. Time and one-half for 0 hours. ❑ b. Time and one-half for 8 hours. ❑ c. Time and one-half for 10 hours. ❑ d. Time and one-half for 18 hours.

a. Time and one-half for 0 hours.

When must overtime be paid? ❑ a. Each week ❑ b. With the next payroll ❑ c. As soon as practically possible

c. As soon as practically possible

A nonexempt employee working at a hospital can work more than 40 hours in a week and not be paid overtime. ❑ True ❑ False

True

To establish the regular rate of pay _Pay for all hours worked less execptions_ All hours worked Yes or No

Yes

All of the following types of compensation are included in calculating an employee’s regular rate of pay for overtime purposes except: ❑ a. Shift premium of $50 for working the night shift ❑ b. Production bonus of $15 ❑ c. 4 hours paid but not worked ❑ d. 4% cost-of-living adjustment

c. 4 hours paid but not worked

What type of pay is included in the regular rate of pay calculation? ❑ a. Discretionary bonuses ❑ b. Paid sick leave ❑ c. Paid vacation leave ❑ d. Production bonuses

d. Production Bonuses

All of the following types of payments are included in the regular rate of pay calculation except: ❑ a. A production bonus to be paid in June which the employer announced in January ❑ b. An agreement with the union to pay one-half of one week’s salary to workers with over five years of service ❑ c. A traditional $100 gift certificate which the firm has paid for the past five years during the holiday season ❑ d. Shift differential for working the 4 p.m. to midnight shift

c. A traditional $100 gift certificate which the firm has paid for the past five years during the holiday season

An employee worked for 30 hours on his regular shift at $10.00 per hour and 16 hours on the late-night shift at $12.00 per hour. In addition, he earned a production bonus of $50.00. What is his total weekly compensation? $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

$577.34 300 + 192 + 50 = $542 $542/46 = $11.78 $11.78 x .5 = $5.89 $5.89 x 6 = $35.34 $542 + $35.34 = $577.34

All of the following are reasons payroll keeps records except: ❑ a. Compliance with laws ❑ b. Demonstrate accuracy of paychecks ❑ c. Demonstrate security of payroll ❑ d. Periodic reporting

c. Demonstrate security of payroll

An employer maintains its employee master file in computer files. Which of the following statements is true? ❑ a. Under federal law, the employer is required to keep a backup copy of these records. ❑ b. Employment records must be kept for seven years. ❑ c. There is no federal requirement to update the data monthly.

c. There is no federal requirement to update the data monthly.

All of the following types of records can be combined with payroll data in an integrated system except: ❑ a. Personnel ❑ b. Benefits ❑ c. Purchasing ❑ d. Human Resources

c. Purchasing

How long should employers keep payroll records beyond legal requirements? ❑ a. 2 years ❑ b. 3 years ❑ c. 4 years ❑ d. As long as the company needs the records

d. As long as the company needs the records

The amount of federal income tax that is withheld from an employee’s regular wages is determined by a formula that uses all of the following items except: ❑ a. Employee’s taxable wages ❑ b. Pay period ❑ c. A flat rate ❑ d. Filing status

c. A flat rate

Which of the following events would require an employee to fill out an amended Form W-4 within 10 days of its occurrence? ❑ a. Employee becomes legally separated from his or her spouse who was claimed as a dependent ❑ b. Employee’s spouse quits job to stay home with a new baby ❑ c. Death of spouse ❑ d. Adoption of a child

a. Employee becomes legally separated from his or her spouse who was claimed as a dependent

An employee was recently married. The employer pays on the 15th and last day of every month. On June 10, the employee submitted a revised Form W-4. When must you change the amount of his withholding? ❑ a. On his June 15th paycheck ❑ b. On his June 30th paycheck ❑ c. On his July 15th paycheck ❑ d. On his July 31 paycheck

c. On his July 15th paycheck

An employee is married with one child. His beginning salary is $2,000 semimonthly. Because of an unexpected business trip, the employee fails to submit a 2022 Form W-4 by his first payday. What withholding status must the employer use for his first paycheck? ❑ a. Single/married filing separately, no entries in Steps 2, 3, or 4 ❑ b. Married filing jointly, no entries in Steps 2, 3, or 4 ❑ c. Single/married filing separately, entry in Step 3 for one dependent ❑ d. Married filing jointly, entry in Step 3 for one dependent

a. Single/married filing separately, no entries in Steps 2, 3, or 4

Under what conditions can an employee claim exemption from withholding on Form W-4? ❑ a. Receiving overtime pay ❑ b. Had no tax liability last year and expects no tax liability this year ❑ c. Anticipates receiving a bonus ❑ d. An employee takes her first job

b. Had no tax liability last year and expects no tax liability this year

An employee claims exempt from withholding on his Form W-4. To continue the exempt status for the next year, a new Form W-4: ❑ a. must be filed by December 31. ❑ b. must be filed by February 15 of the following year. ❑ c. is not necessary. ❑ d. is invalid if the employee claims more than 10 dependents.

b. must be filed by February 15 of the following year.

All employees must complete a new Form W-4 each year. ❑ True ❑ False

False

Resident aliens are generally subject to the same federal tax withholdings as U.S. citizens. ❑ True ❑ False

True

The primary way that a company determines if a worker qualifies as an employee or independent contractor is the common law test. The reasonable basis test allows for exceptions. True False

True

Within how many calander days of date of hire are employers required to report new hires? a. 10 b. 20 c. 15 d. reporting is optional

b. 20 In general, employers must report newly hired employees within 20 calendar days of the date of hire. If an employer reports new hires magnetically or electronically, it must send at least two transmissions each calendar month which are 12–16 days apart.

What law determines the time limits with which employees must be paid after wages are earned? A. Fair Labor Standards Act B. Internal Revenue Code C. Social Security Act D. State laws

A. FLSA

Under the FLSA, what basis is used to determine whether a nonexempt employee is to be paid overtime? A. Hours worked in a day B. Hours worked in a workweek C. Hours worked in a pay period D. Hours worked in a month

B. Hours worked in a workweek

Overtime payments are included in the calculation of what tax, if any? A. Federal income tax B. Social security tax C. Medicare tax D. They are included in all tax calculations

D. They are included in all tax calculations

If an employee does not have federal income tax withheld and has not claimed exempt, what must the employer do? A. Provide the employee with the EITC notice B. Withhold federal income tax in the subsequent year C. Request that the employee submit a new Form W-4. D. Not report the amount of the payments in Box 1 of Form W-2

A. Provide the employee with the EITC notice

What federal taxes must an employer withhold from an employee’s reported tips? A. Federal income tax only B. Social security tax only C. Medicare tax only D. Federal income, social security and Medicare tax

D. Federal income, social security and Medicare tax

Under the FLSA, when determining whether a nonexempt employee is to be paid overtime, the employer uses the hours worked in a: A. day. B. workweek. C. pay period. D. month.

B. workweek.

Employees can provide their employer with their filing status, dependents, and other adjustments for income tax withholding purposes by: A. telling their supervisor. B. completing Form W-4. C. completing their employment application. D. a telephone call.

B. completing Form W-4.

The amount of federal income tax that is withheld from an employee’s regular wages is determined by a formula that uses all of the following information items EXCEPT: A. pay period. B. filing status. C. a flat rate. D. employee’s taxable wages.

C. a flat rate.

What authority controls the frequency with which employees must be paid? A. State laws B. FLSA rules C. Local laws D. IRS rules

A. State laws