Compensation & Benefits

Question 1

FLSA

Answer 1

Fair Labor Standard Act
Establishes minimum wage and overtime pay, child labor and defining exempt/non-exempt employees
Requires companies set a standard workweek that should not shift unless there is a legitimate business reason
Allows for compensation days at OT rate instead of OT pay
Requires record keeping of sex & race information of employees

Question 2

Employee Retirement Income Security Act

Answer 2

establishes minimum standards for benefit plans for private employers

Question 3

Pension Benefit Guaranty Corporation

Answer 3

federal agency created to protect pension benefits

Question 4

Vesting

Answer 4

benefits from a retirement account or pension plan that belong to the employee despite his retention at the company

Question 5

Graded Vesting

Answer 5

set schedule where employees are vested at a percentage less than 100% each year until they accrue enough years to be considered 100% vested.

Question 6

Cliff Vesting

Answer 6

Refers to employees becoming 100% vested after a specified number of years

Question 7

Non-Exempt Employees

Answer 7

Usually paid hourly/daily/weekly
Do not involve the supervision of other or use of independent judgement
Does not require specialized education
Overtime pay is required at 1.5x over 40 hours

Question 8

Exempt Employees

Answer 8

Usually paid by salary
Often involves supervision of others & independent judgement in one of 3 categories - Executive (directs others’ work, management is primary focus), Professional (knowledge in a specific field) or Administrative (exercises discretion/judgement in respect to significant matters)
May require specialized education
Overtime pay is not required

Question 9

Independent Contractors vs Employees

Answer 9

Determined by 3 categories:

Behavioral - company dictates where, when, how employee works (employee); training takes place (employee); person can sub-contract work or pay own assistants (IC); Success of business relies on person (employee)

Financial - Hourly/weekly/monthly pay (employee); Paid-for travel expenses (employee); Tools & Materials paid for (employee); Investment in own facility (IC); P&L realization (IC)

Type of Relationship - Ongoing (employee); Set hours/Full Time (employee); On Site (employee); Sequence of work determined by company (employee); Report requirement (employee); Provide services for multiple companies (IC); Available to public (IC); Company has right to discharge (employee); Person has right to terminate relationship (employee)

Question 10

HIPAA

Answer 10

Health Insurance Portability & Accountability Act
Five points:
1. Health Coverage when Changing Jobs
2. Nat’l Standards for processing electronic healthcare transactions
3. Tax-related guidelines from medical care
4. Defines healthcare reform
5. Provisions on company-owned life insurance and employees who lose citizenship after tax crimes

Question 11

Range Spread

Answer 11

Max salary - Min Salary over min salary 
Typically:
Non-exempt spread: 40%
Exempt Spread: 50%
Exec Spread: 60%

Question 12

Broadbanding

Answer 12

Combining multiple pay grades to allow for larger ranges.

Allows for more pay raises for lateral moves (non-promotion raises)

Question 13

Compa-Ratio

Answer 13

Ratio of pay rate to midpoint (rate over median)

Question 14

Red Circle Rate

Answer 14

Amount above high end of a pay range

Question 15

Green Circle

Answer 15

Amount below low end of a pay range

Question 16

Productivity Based Pay

Answer 16

Pay is determined by employee’s output

Question 17

Single Rate Pay

Answer 17

Every worker with the same job has the same rate of pay despite seniority or performance

Question 18

Aging

Answer 18

A process that adjusts data to stay current

Question 19

Worker’s Comp

Answer 19

No fault
Managed by states
Paid for in return for denial of legal action