Compensation & Benefits

Question 1

A law set in place that affects most private and public employment. It requires employers to pay covered employees (who are not otherwise exempt) no less than the federal minimum wage and overtime pay of one-and-one-half times the regular rate of pay for all hours worked over 40 in a week.

Answer 1

Fair Labor Standards Act (FLSA)

Question 2

A requirement under the FLSA that an employee must be at least 16 years old to work in most non-farm jobs and at least 18 to work in non-farm jobs declared hazardous by the Secretary of Labor. Children 14 and 15 years may work outside school hours in various non-manufacturing, non-mining, non-hazardous jobs.

Answer 2

Child Labor

Question 3

A requirement under the FLSA where employers must keep records for each covered, nonexempt worker. There is no required form for the records, but the records must include accurate employee data, hours worked, and wages earned.

Answer 3

Recordkeeping

Question 4

A requirement where the FLSA provides an exemption from both minimum wage and overtime pay. To qualify, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less that $684 per week.

Answer 4

Exempt Status

Question 5

If the individual is an ________________ ______________, the employer is generally relieved of responsibility for withholding and paying employment taxes, providing benefits, and ensuring protections of other employment laws.

Answer 5

Independent Contractor

Question 6

This wage law requires equal pay for men and women doing substantially equal work on jobs which require equal skill, effort, and responsibility and are performed under similar working conditions.

Answer 6

Equal Pay Act

Question 7

This amended Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, and the Rehabilitation Act to clarify compensation practices that allow pay discrimination to be determined with the issuance of each new paycheck rather than the old system whereby the complainant had only 180 days to file a complaint from the initial discriminatory wage decision.

Answer 7

Lilly Ledbetter Fair Pay Act

Question 8

A federal insurance program that provides monthly payments to eligible workers and their families when a worker retires, dies, or becomes disabled. It’s funded by the employee and employer contributions and collected by IRS through payroll taxes under the Federal Insurance Contribution Act (FICA).

Answer 8

Social Security/Retirement Legislation

Question 9

This act provides health insurance and reasonable job security for military personnel and other emergency deployments.

Answer 9

Uniformed Services Employment

Question 10

This act includes a broad ban against age discrimination and specifically prohibits denial of benefits to older employees (over the age of 40) since they are often more expensive to provide with health care coverage.

Answer 10

Age Discrimination in Employment Act (ADEA)

Question 11

A benefit through a federal-state program designed to provide qualifying workers with financial security during temporary unemployment. This is usually provided while workers are seeking employment after loosing a job such as layoffs.

Answer 11

Unemployment Compensation Laws & Regulations

Question 12

This act requires reporting and disclosure of employment sponsored retirement benefit plans. Retirement plans are not required by law, but when offered, must comply with this act’s standards.

Answer 12

Employee Retirement Income Security Act (ERISA)

Question 13

Requires employers to provide the same insurance, leave pay, and additional support to pregnant employees as would be provided to any employee with medial leave or a disability.

Answer 13

Pregnancy Discrimination Act

Question 14

The act applies to employees with 20 or more workers and who have a group health plan to offer continued coverage to their employees and their dependents for an additional 18 months under qualifying conditions (reduction of hours) in which coverage would normally end.

Answer 14

Consolidated Omnibus Budget Act

Question 15

This act requires employers with at least 50 employees to provide up to 12 workweeks of unpaid leave for covered events during a 12-month period.

Answer 15

Family and Medical Leave Act (FMLA)

Question 16

This act is also known as Obamacare. The logic behind the act is to share responsibility for health care and it ensures that all Americans have access to quality, affordable, health care. The law requires all Americans to have a minimum amount of health care coverage to reduce everyone’s overall cost.

Answer 16

Patient Protection & Affordable Care Act

Question 17

The three primary goals of a compensation program

Answer 17

Recruitment, Retention & Motivation

Question 18

The psychological and intellectual rewards in a position. An example would be having the opportunity to perform meaningful work or gain a sense of accomplishment.

Answer 18

Intrinsic Rewards

Question 19

Rewards that derive from external sources to the job. They include rewards such as prestige, positive feedback, and financial rewards.

Answer 19

Extrinsic Rewards

Question 20

_______ ____________ should be designed to support the company’s overall business strategies and to provide management with an internal control mechanism for achieving compensation objectives.

Answer 20

Pay Structures

Question 21

The concern that the organization must pay workers performing similar jobs a similar rate of pay. It is the perception workers have of their pay levels being fair based on their workload.

Answer 21

Internal Equity

Question 22

This act permits wage differentials between sexes if authorized by the Equal Pay Act.

Answer 22

The Civil Rights Act

Question 23

This act allows wage differentials if they are based on: a seniority system, a merit system, a system that measures earning by quantity or quality of production, or any factor other than sex.

Answer 23

The Equal Pay Act (EPA)

Question 24

The value differential between the organization’s reward system relative to employees in other firms. Usually the value differential is defined by employee perception of local market pay practices.

Answer 24

External Equity

Question 25

Positions that are studied when conducting wage surveys. Not all positions have sufficient sample sizes to gather relevant data. Thus, a few key jobs are surveyed and results allow employers to compare salaries and benefits in the recruitment area.

Answer 25

Benchmark Jobs

Question 26

The process of systematically determining a relative value of jobs in an organization to set grades and group jobs.

Answer 26

Job evaluation

Question 27

Refers to pay rates above the maximum of the pay range. Depending on company’s policy, a pay rate over maximum may be brought into line either immediately or over a period.

Answer 27

Red Circle Rates

Question 28

Refers to pay rates below the minimum of the salary range. Depending on company’s policy, the pay rate may be reduced or eliminated immediately or over a period.

Answer 28

Green Circle Rates

Question 29

A structure in which a job has a single rate of pay. A company uses one rate for new employees and another rate for all other employees combined pay structure.

Answer 29

Fixed Rates

Question 30

A pay structure using salary ranges that are divided into several steps or pay rates. Various steps are calculated at a constant dollar difference (ex:$500) or a percentage difference (ex: 4%-7%). The range maximum is usually set AT or ABOVE the competitive market rate for the job.

Answer 30

Step Rates

Question 31

These reward systems pay employees based on individual, business unit, or corporate performance, or on a combo of each. Such a program should be based on the company’s business strategy and complement its operations processes, management style, and financial objectives.

Answer 31

Performance-Based Pay

Question 32

Pay that is tied to performance. Permanent increases in wages result after the employer assesses the quality of the employee’s work over a period. Other individual incentive plans include skill-based pay, key contributor programs, spot awards, commissions, and piece-rate plans.

Answer 32

Merit Pay

Question 33

These types of pay structures are nontraditional forms of compensation. They link an employee’s pay to the number of skills the employee can perform or the number of competencies he or she has mastered. Progress through salary ranges is acquired through new skills and knowledge.

Answer 33

Skill-Based and Competency-Based Pay

Question 34

Plans that reward individuals or teams whose skills, abilities, performance, or contributions have enhanced an organizations products, services, or processes and thereby improved its market, position, productivity, or profitability.

Answer 34

Key Contributor Programs