Payroll Acts and Laws

6 - What is the meaning of the term "compensable time?"

"Compensable time" is defined as all hours during which the employee is under the employer's control, even if the time is unproductive, so long as the time spent is for the employer's benefit.

13 - Attendance at lectures, meetings, seminars, and training sessions is considered work time unless certain conditions are met. What are these conditions?

All the following conditions must be met for attendance at meetings, lectures, seminars, and training sessions to be considered nonwork time: * The meeting, lecture, etc., is not held during the employee's regular work hours. * Attendance is voluntary. * The meeting, lecture, etc., is not directly related to the employee's job. * The employee does not perform any productive work for the employer while attending.

15 - What penalties can be assessed for violations of the FLSA's child labor restrictions?

Employers can be fined up to $12,529 for each violation of the child labor restrictions and up to $55,947 for each violation that causes death or serious injury of a minor.

3 - What is the basic difference between exempt and nonexempt employees?

Exempt employees do not have to be paid the required minimum wage or overtime pay, and the employer does not have to keep certain records detailing their work, while nonexempt employees must be paid the required minimum wage and overtime pay and the employer must keep detailed records of their work hours and wage payments.

4 - The job title is a strong factor in determining whether an employee is exempt from the minimum wage and overtime provisions of the FLSA. TRUE OR FALSE

FALSE - An important sounding job title does not exempt an employee from the minimum wage and overtime pay provisions of the FLSA. The employee's actual duties and salary must meet the tests of the exemption.

10 - The time spent by employees during bona fide meal periods is considered working time. TRUE OR FALSE

FALSE - Bona fide meal periods during which the employee is completely relieved from duty are not working time.

1 - The FLSA always overrides any state wage-hour laws. TRUE OR FALSE

FALSE - Employers must comply with whichever law is more beneficial to the employee.

22 - Wages other than cash are included in the minimum wage calculation if they primarily benefit the employer. TRUE OR FALSE

FALSE - In addition to wages paid in the form of cash, employees may be paid in other forms as well. They may be paid partly in room, board, or other facilities provided by the employer. These facilities must primarily benefit the employee, not the employer, in order to be classified as wages.

20 - Taxicab drivers are exempt from the minimum wage and overtime requirements of the FLSA. TRUE OR FALSE

FALSE - Taxicab drivers are only exempt from the overtime pay requirements.

8 - The FLSA requires overtime pay for hours worked on Sunday. TRUE OR FALSE

FALSE - The FLSA does not require overtime pay for hours worked on Sunday, unless the total hours worked for the workweek exceed 40.

11 - The FLSA requires employers to pay employees for hours not worked because of illness. TRUE OR FALSE

FALSE - The FLSA does not require the employer to pay for hours not worked because of illness.

15 - Sharon works in Hawaii, where the minimum hourly wage is $10.10. At that time, Sharon must be paid at least the federal minimum hourly wage of $7.25 if she is covered by both the state wage hour law and the FLSA. TRUE OR FALSE

FALSE - The Hawaii state minimum hourly wage is higher than the federal minimum wage, so Sharon must be paid the state minimum hourly wage of $10.10.

13 - To determine gross earnings, the total overtime earnings are subtracted from the total regular earnings. TRUE OR FALSE

FALSE - To determine gross earnings, the total overtime earnings are added to the total regular earnings.

9 - Employers are required by the FLSA to give rest periods to employees. TRUE OR FALSE

FALSE - Under the FLSA, employers are not required to give rest periods to employees. However, rest periods may be required by state law.

25 - A mechanic must be reimbursed for the cost if laundering his work clothes if the clothes are required by the employer. TRUE OR FALSE

FALSE - When employees are required to wear uniforms that cannot be worn as regular "street clothing" and their cost and maintenance would put the employee below the minimum hourly wage, the employer must pay for the purchase, cleaning, and repair of the uniforms. If the uniform can be worn off the job, the employer need not reimburse the employee, even if the employee's wages go below the minimum.

24 - For the purpose of determining whether the minimum wage has been paid, service charges automatically added to a customer's bill are classified as tips. TRUE OR FALSE

FALSE - When service charges are automatically added to the customers' bills and then turned over to the employee, these amounts are not tips and are considered wages when determining whether the minimum wages has been paid.

9 - Margie's annual salary is $23,400, and she is paid every Friday. Margie is a nonexempt employee who normally works 40 hours per workweek. In one workweek, Margie worked 48 hours. Calculate her total earnings for the workweek.

Hours worked in a year: 52 weeks x 40 hours = 2,080 Regular rate of pay: $23,400 / 2,080 = $11.25 Regular pay: $11.25 x 48 hours = $540.00 Overtime hours: 48 - 40 = 8 Overtime premium rate: $11.25 x .5 = $5.63 Overtime premium pay: $5.63 x 8 = $45.04 Total earnings: $540.00 + $45.04 = $585.04

14 - What restrictions does the FLSA place on employers regarding the employment of minors under 18?

No minors under age 18 can work in a job that has been declared hazardous by the Wage and Hour Division. Some minors age 16 and 17 are exempt from these restrictions under student learner or apprenticeship programs, under an exception for loading paper balers and compactors, or under an exception for 17-year-olds who work with wood products under the supervision of a parent and meet several other requirements.

5 - George, a nonexempt employee, received a production bonus of $38 for a workweek in addition to his regularly hourly rate of $10. George worked 44 hours during the workweek. Calculate his total earnings for the workweek.

Regular hourly pay : $10.00 x 44 hours = $440.00 Total regular pay: $440 + $38.00 = $478.00 Regular rate of pay: $478 / 44 hours = $10.86 Overtime hours: 44 - 40 = 4 Overtime premium rate: $10.86 x .5 = $5.43 Overtime premium pay: $5.43 x 4 = $21.72 Total earnings: $478.00 + $21.72 = $499.72

3 - Bob, a nonexempt employee, receives a hourly wage of $12 for a 35-hour workweek. In one week, in addition to his regular hours he worked 7 hours on Saturday. Calculate his total earnings for the workweek.

Regular pay : $12.00 x 42 hours = $504.00 Overtime hours: 42 - 40 = 2 Overtime premium rate: $12.00 x .5 = $6.00 Overtime premium pay: $6.00 x 2 = $12.00 Total earnings: $504.00 + $12.00 = $516.00

2 - Joe, a nonexempt employee, receives an hourly wage of $9 for a 40-hour workweek. During one workweek he worked 47 hours. Calculate his total earnings for the workweek.

Regular pay : $9.00 x 47 hours = $423.00 Overtime hours: 47 - 40 = 7 Overtime premium rate: $9.00 x .5 = $4.50 Overtime premium pay: $4.50 x 7 = $31.50 Total earnings: $423.00 + $31.50 = $454.50

6 - Susan, a nonexempt employee, received a Christmas bonus of $100 from her employer that does not have to be included in her regular rate of pay for the week in which it is received. During that week, Susan worked 48 hours and her hourly rate of pay was $9.50. Calculate her total earnings for the workweek.

Regular pay : $9.50 x 48 hours = $456.00 Overtime hours: 48 - 40 = 8 Overtime premium rate: $9.50 x .5 = $4.75 Overtime premium pay: $4.75 x 8 = $38.00 Discretionary bonus: $100.00 Total earnings: $456.00 + $38.00 + $100.00 = $594.00

4 - Teri is a nonexempt employee who normal hourly rate is $10, but she receives a $1 per hour shift differential for working the midnight to 8 am shift. During one workweek she works 45 hours on the late shift. Calculate her total earnings for the workweek.

Regular pay : ($10 + $1) x 45 hours = $495.00 Overtime hours: 45 - 40 = 5 Overtime premium rate: $11.00 x .5 = $5.50 Overtime premium pay: $5.50 x 5 = $27.50 Total earnings: $495.00 + $27.50 = $522.50

7 - Eric, a nonexempt employee, is paid a shift differential for working different shifts. For 3 days during the workweek he works 8 hours a day for $10 an hour. On 2 other days, he works 10 hours a day for $12 an hour. Calculate Eric's total earnings for the workweek.

Regular pay : ($10.00 x 24 hours) + ($12.00 + 20 hours) = $240.00+ $240.00 = $480.00 Regular rate of pay: $480.00 / 44 hours = $10.91 Overtime hours: 44 - 40 = 4 Overtime premium rate: $10.91 x .5 = $5.46 Overtime premium pay: $5.46 x 4 = $21.84 Total earnings: $480.00 + $21.84 = $501.84

15 - Debbie agreed with her employer prior to the performance of any work that she would be paid 1-1/2 times the regular piece rate for any work produced during overtime hours. Debbie is paid $0.30 for each unit she produces. In one workweek, she produced 1,560 units is the first 40 hours and 212 in the next 4 hours. Calculate her total earnings for the workweek.

Regular piecework earnings: $0.30 x 1,560 units = $468.00 Overtime piece rate: $0.30 x 1.5 = $0.45 Overtime earnings: $0.45 x 212 = $95.40 Total earnings: $468.00 + $95.40 = $563.40

13 - John, a production worker, is paid $0.50 per unit under a piece-rate system. During one workweek, John produced 840 units in 46 hours. Calculate his total earnings for the workweek.

Regular piecework earnings: $0.50 + 840 units = $420.00 Regular rate of pay: $420.00 / 46 hours = $9.13 Overtime hours: 46 - 40 = 6 Overtime premium rate: $9.13 x .5 = $4.57 Overtime premium pay: $4.57 x 6 = $27.42 Total earnings: $420.00 + $27.42 = $447.42

14 - Mark works under the piece-rate system and receives $2 for each component he produces. He also receives a bonus of $0.50 for each component over 300 in a workweek. In one workweek, Mark produced 326 components in 43 hours. Calculate his total earnings for the workweek.

Regular piecework earnings: $2.00 x 326 units = $652.00 Production bonus: $0.50 x 26 units = $13.00 Total piecework earnings plus bonus: $652.00 + $13.00 = $665.00 Regular rate of pay: $665.00 / 43 hours = $15.47 Overtime hours: 43 - 40 = 3 Overtime premium rate: $15.47 x .5 = $7.74 Overtime premium pay: $7.74 x 3 = $23.22 Total earnings: $652.00 + $13.00 + $23.22 = $688.22

8 - Joe, a nonexempt employee, is paid a salary of $520 a week for a workweek consisting of 40 hours. Overtime is paid at 1-1/2 times the regular rate of pay. Last week Joe worked 49 hours. Calculate his total earnings for the week.

Regular rate of pay : $520.00 / 40 hours = $13.00 Regular pay: $13.00 x 49 hours = $637.00 Overtime hours: 49 - 40 = 9 Overtime premium rate: $13.00 x .5 = $6.50 Overtime premium pay: $6.50 x 9 = $58.50 Total earnings: $637.00 + $58.50 = $695.50

1 - David, a nonexempt employee hospital employee, has agreed with the hospital to work on a 14-day work period basis, and his regular rate of pay is $10 an hour. David works 5 days at 9 hours each and 4 days at 10 hours each during the 14-day period. Calculate his gross pay for the period.

Step 1 - Calculate total earnings due if overtime pay is required for hours worked over 8 in a day. Regular pay: $10 x 85 hours = $850. Overtime hours: [5 x (9-8)] + [4 X (10-8)] = 13. Overtime premium rate: $10 x .5 = $5. Overtime premium pay: $5 x 13 hours = $65. Total earnings: $850 + $65 = $915. Step 2 - Calculate total earnings due if overtime pay is required for hours worked over 80 in the 14-day work period. Regular pay: $10 x 85 hours = $850. Overtime hours: 85 - 80 = 5. Overtime premium rate: $10 x .5 = $5. Overtime premium pay: $5 x 5 hours = $25. Total earnings: $850 + $25 = $875. Step 3: David must be paid the higher of the result in Step 1 or 2 = $915.

12 - The FLSA does not require that an employee's preliminary and postliminary activities be counted as time worked. TRUE OR FALSE

TRUE

14 - The FLSA is commonly known as the Federal Wage-Hour Law. TRUE OR FALSE

TRUE

16 - "Mom and Pop" shops whose only employees are immediate family members are excluded from coverage under the FLSA. TRUE OR FALSE

TRUE

17 - Exempt employees do not have to be paid the required minimum wage or overtime payments. TRUE OR FALSE

TRUE

18 - The Portal-to-Portal Act of 1947 generally states that travel time spent commuting from home to work and work to home is not considered compensable work time. TRUE OR FALSE

TRUE

19 - Seaman working on foreign ships are fully exempt from the FLSA's minimum wage and overtime requirements. TRUE OR FALSE

TRUE

2 - The basic unit for determining the proper wages due employees is the workweek. TRUE OR FALSE

TRUE

23 - The FLSA requires employers to pay tipped employees a cash wage of at least $2.13 per hour. TRUE OR FALSE

TRUE

3 - Hospital workers are covered by the FLSA regardless of the hospital's annual volume of revenue. TRUE OR FALSE

TRUE

5 - Employers that enter into an agreement with their employees to pay them a fixed weekly wage even though their hours vary from week to week are operating under a fluctuating workweek. TRUE OR FALSE

TRUE

6 - FLSA wages include the fair market value of facilities such as board and lodging. TRUE OR FALSE

TRUE

7 - The FLSA requires overtime pay at 1-1/2 times the employee's regular hourly rate of pay. TRUE OR FALSE

TRUE

21 - For a 40-hour workweek, Paul, who is a nonexempt employee, is paid $270. This is a violation of the FLSA. TRUE OR FALSE

TRUE - 40 x $7.25 = $290

1 - What are five area regulated by the Fair Labor Standards Act?

The five major areas regulated by the Fair Labor Standards Act are: * Minimum wage * Overtime * Child labor * Equal pay * Recordkeeping

7 - The "white collar" exemption from the minimum wage and overtime provisions of the FLSA is made up of what categories of employees?

The following categories of employees make up the "white collar" exemption under the FLSA: * Administrative * Executive * Professional * Computer-related professional * Outside sales

12 - What conditions must be met for an employer to take advantage of the tip credit?

The following conditions must be met for an employer to apply the tip credit to the minimum wage: * The employee must be a "tipped employee," which is an employee working in an occupation in which he or she regularly receives at least $30 per month in tips. * The employee must receive at least as much in tips as the credit taken by the employer. * The employee must be informed about the tip-credit provisions of the law before the credit is taken. * All tips received by the employee must be kept by the employee, although tip pooling may be required among employees who are customarily and regularly tipped. * Credit cards tips must be given to the employee by the next payday.

8 - What questions must be answered before overtime pay can be calculated?

The following questions must be answered to properly calculate overtime pay: * What is the employee's workweek? * What constitutes hours worked? * What payments made to the employee are considered wages? * What is the employee's regular rate of pay?

5 - A plan similar to the fluctuating workweek plan was approved by the U.S. Supreme Court and later made part of the FLSA and its regulations. What is this plan called, and what does it provide?

The plan is called the "Belo" plan, named after the company involved in the Supreme Court's decision, and the plan guarantees a fixed salary for irregular hours that includes a set amount of overtime pay.

9 - What is the "regular rate of pay" and how is it determined?

The regular rate of pay is an hourly rate of pay determined by dividing the total regular pay actually earned for the workweek by the total number of hours worked. For salaried nonexempt employees, the regular rate of pay is the employee's salary divided by the number if hours the salary is intended to compensate.

4 - What is the time limit for filing an FLSA complaint with the Wage and Hour Division?

The time limit is two years after the alleged violation or three years if the violation was willful.

11 - What must an employee's primary duty be to qualify for the administrative employee exemption under the FLSA?

To qualify as an administrative employee: * The employee's primary salary duty must be the performance of office or nonmanual work directly related to the management or general business operations of the employer or the employer's customers. * The employee's primary duty must include the exercise of discretion and independent judgement regarding matters of significance.

2 - Under the FLSA, what are the differences between enterprise coverage and individual employee coverage?

Under enterprise coverage, all the employees of a business are covered by the FLSA so long as at least two employees of the business are engaged in interstate commerce or involved in the production of goods or service for interstate commerce, and the business has annual gross sales of at least $500,000. Individual employees can be covered even if the business is not a covered enterprise if the employee is engaged in interstate commerce or the production of goods for interstate commerce.

11 - Sandra works 32 hours per week, is a nonexempt employee, and is paid a semimonthly salary of $1,000. In one workweek, Sandra worked 42 hours. Calculate her total earnings for the workweek.

Yearly earnings: $1,000 x 24 = $24,000 Hours worked in a year: 52 weeks x 32 hours = 1,664 Regular rate of pay: $24,000 / 1,664 = $14.42 Regular pay: $14.42 x 42 hours = $605.64 Overtime hours: 42 - 40 = 2 Overtime premium rate: $14.42 x .5 = $7.21 Overtime premium pay: $7.21 x 2 = $14.42 Total earnings: $605.64 + $14.42 = $620.06

10 - Jim is a nonexempt employee who is paid a monthly salary of $1,500 and normally works 40 hours per workweek. Last week, Jim worked 49 hours. Calculate his total earnings for the workweek.

Yearly earnings: $1,500 x 12 months = $18,000 Hours worked in a year: 52 weeks x 40 hours = 2,080 Regular rate of pay: $18,000 / 2,080 = $8.65 Regular pay: $8.65 x 49 hours = $423.85 Overtime hours: 49 - 40 = 9 Overtime premium rate: $8.65 x .5 = $4.33 Overtime premium pay: $4.33 x 9 $38.97 Total earnings: $423.85 + $38.97 = $462.82

12 - Tony is a nonexempt employee who works 35 hours per week and is paid a monthly salary of $2,500. During a certain workweek, Tony worked 43 hours. Calculate his total earnings for the workweek.

Yearly earnings: $2,500 x 12 months = $30,000 Hours worked in a year: 52 weeks x 35 hours = 1,820 Regular rate of pay: $30,000 / 1,820 = $16.48 Regular pay: $16.48 x 43 hours = $708.64 Overtime hours: 43 - 40 = 3 Overtime premium rate: $16.48 x .5 = $8.24 Overtime premium pay: $8.24 x 3 = $24.72 Total earnings: $708.64 + $24.72 = $733.36

10 - Company B hires a computer systems analyst and agrees to pay the employee $25 an hour. If this person works over 40 hours in a week, is the employee due overtime pay?

Yes. In order for the computer professional exemption to apply to an hourly paid employee, the employee would have to be paid at least $27.63 per hour.

5 - What is the maximum number of hours a nonexempt employee can work in a workweek under the FLSA before overtime premium pay is due? a. 40 b. 55 c. 80 d. 168

a. 40

6 - Barbara is an hourly paid employee making $7.48 per hour. She is scheduled to work 35 hours a week. For the past week, Barbara worked 43 hours. Under the FLSA, what is the minimum she must receive as gross pay? a. $261.80 b. $332.86 c. $310.42 d. $321.64

b. $332.86 $7.48 x 43 = $321.64 $7.48 x 3 x .5 = $11.22 $321.64 + $11.22 = $332.86

1 - What government agency enforces the Equal Pay Act? a. National Labor Relations Board b. Equal Employment Opportunity Commission c. Wage and Hour Division d. Federal Trade Commission

b. Equal Employment Opportunity Commission

10 - Which of the following areas is not governed by the Portal-to-Portal Act? a. Travel time b. Equal pay for equal work c. De minimis time d. Preliminary and postliminary activities

b. Equal pay for equal work

7 - Which of the following laws established minimum wage and overtime standards in the U.S.? a. Civil Rights Act b. Fair Labor Standards Act c. Age Discrimination in Employment Act d. Federal Insurance Contributions Act

b. Fair Labor Standards Act

9 - Employees covered by collective bargaining agreements may be exempt from which provisions of the FLSA? a. Minimum wage requirements b. Overtime pay requirements c. Minimum wage and overtime requirements d. Child labor restrictions

b. Overtime pay requirements

2 - Which of the following conditions of employment is governed by the FLSA? a. The frequency of pay for employees b. Recordkeeping requirements c. Hours worked by employees over the age of 16 d. Lunch and rest break requirements

b. Recordkeeping requirements

3 - What is the minimum wage that hourly paid computer professionals must be paid to be exempt from the overtime requirements of the FLSA? a. $4.25 per hour b. $10.00 per hour c. $29.967 per hour d. $27.63 per hour

d. $27.63 per hour

8 - Sam's regular workweek consists of 40 hours and he is paid biweekly. If Sam works 38 hours in week one and 43 hours in week two, how many overtime hours must be paid for? a. 0 b. 1 c. 1.5 d. 3

d. 3

4 - What is the FLSA salary test for outside salespersons? a. $425 per workweek b. $250 per workweek c. $455 per workweek d. There is no salary minimum

d. There is no salary minimum