CPP Module 1 Flashcards
Payroll Concepts
Tipped Employee Hourly Rate
$2.13/hr
Form W-4 is invalid when?
Alterations, additions, or deletions. Also if the form is not completed, signed, or dated or the employee indicates the information they provided is false.
Child Labor Laws for 14 and 15 year olds
3 hours per day and 18 hours per week when school is in session.
8 hours per day and 40 hours per week when school is not in session.
Child Labor Laws 16-18
Cannot work in any job declared hazardous
Enterprise Coverage Test for FSLA coverage
When all employees of a business are covered
Individual Employee Coverage Test for FSLA
Employee is covered if their job is related or closely related to interstate commerce
Regular Rate of Pay Excludes
Gifts, reimbursed expenses, paid hours not worked (PTO), stock options, discretionary bonus, and overtime premiums in excess of the required rate.
Exempt employees are determined by
Primary job duties and weekly salary
Exempt professional employee duties
Either a learned or creative professional. Requires either advanced knowledge or involving invention or talent.
FLSA Highly Compensated Employee
Falls under executive, administrative or professional. And has an annual compensation of $107,432
What is FMLA Leave
12 weeks of unpaid leave within a 12 month period after 12 months of full time work
IRS Penalties for intentional employee misclassification
Employer is liable for 100% of FIT, SS, and Medicare. Employer and Employee liability.
Minimum weekly exempt salary
$684.00 per week.
Teachers, lawyers, and attorneys are not required to be paid a minimum salary.
Overnight travel is compensated when
the travel coincides within the employees regular working hours. It can be any day of the week
The Reasonable Basis Test
Allows employers to treat employees as independent contractors as long as there is a reasonable basis for doing so.
IRS Rulings, past Audits, Legal guidance, etc.
What is an Employee?
Has taxes withheld from wages, reimbursed for expenses, employer is in charge of where, when and how work is done, performs services under company’s name.
What is an Independent Contractor?
Sets own hours, determines how work is done, can work for multiple organizations, works by job, and can employ assistants
Exempt employee types (4)
- Administrative
- Executive
- Professional
- Outside Sales
When do Exempt W-4 forms expire?
February 15 following submission
What does FSLA cover? (MR CEO)
M - Minimum Wage R - Record Keeping, C - Child Labor, E - Mandates Equal Pay, O - Overtime
What is form SS-8?
Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. Used to determine a worker’s status with the IRS
What is the 8/80 Rule?
A workweek exception used by hospitals and nursing homes. OT is paid for either working over 8 hours per day or 80 hours in a 14 day period - whichever is a higher payout.
What is SSNVS?
Social Security Number Verification Service
What is Form W-4P used for?
Periodic Pension and Annuity Payments. Allows retirees to request the amount of FIT for pension and anuity payments by specifying dependents and any other adjustments.
What is Form W-4S used for?
Sick Pay. Allows employees to request income tax withholding from third party sick pay
Non-Discretionary Bonus
A contractual or agreed-upon bonus or incentive. When paid to non-exempt employees they are included in RROP.
What is backup withholding?
When a TIN is not provided or an organization is notified by the IRS to withhold, it is a 24% FIT withholding.
The amount is reported annually on Form 945.
Federal Minimum Wage
$7.25
What is FLSA?
Fair Labor Standard Act. Manages federal wage and hour laws.
What is RROP?
Regular Rate of Pay. Used to calculate a nonexempt employee’s overtime premium.
Total regular pay / Total hours worked
When must an amended W-4 be processed?
With the first payroll or within 30 days after form is submitted.
Statutory Employee (DISH)
D - Agent or Commission Driver, I - Insurance Salesperson, S - Sales Person, H - Homeworker
A worker who is not an employee under Common Law, but are treated as such for tax purposes for Medicare and SS only.
Statutory Nonemployee (REDS)
Real Estate agent and Direct Seller
A worker who is not an employee under Common Law, but is treated as one. Earnings are NOT subject to FUTA or FICA
What is economic realities factors?
Used by the DOL to determine an employer-employee relationship where the worker is economically dependent on the employer
When must an amended W-2 be put into place?
Within 30 days.
