HR Chapter 14 Quiz Questions

Which of the following is true of employee benefits? A. Employees significantly underestimate the cost and value of their benefits B. Employers do an effective job of communicating the cost and value of benefits to their employees C. Employees, for the most part, are just not interested in thier benefits D. Employees have a thorough understanding of what benefits they have and what the market value of these benefits is E. Employers have very limited options for communicating information about benefits

A. Employees significantly underestimate the cost and value of their benefits

Ryan was working as an engineer at a paint manufacturing company. A chemical spill at the factory caused an accident that left him permanently disabled. Which of the following programs is specifically designed to help employees like Ryan? A. Social Security B. Work sharing plan C. Unqualified retirement plan D. Defined-benefit plan E. Vested-benefit plan

A. Social Security

A _____ pension plan allows pension benefits for key employees, such as highly paid managers, to exceed a government-specified share of total pension benefits A. multiemployer B. top-heavy C. special draw rights D. deferred E. defined contribution

B. top-heavy

What are vesting rights? A. Ability of younger workers to move their retirement savings to another account after leaving a specific employer B. Government commitment to provide retirement benefits to all U.S. workers C. Guarantee that employees in a pension plan will receive a pension at retirement age, regardless of whether they stay with the employer D. Ability of retired employees to retain their security if they return to work at their former employer E. Designation that retired workers will receive cost-of-living increases as part of their monthly pension checks

C. Guarantee that employees in a pension plan will receive a pension at retirement age, regardless of whether they stay with the employer

Which of the following is true about disability insurance? A. Most employers offer long-term disability plans B. Payments under short-term plans are lesser than that of long-term plans C. It pays about 50%-70% of the employee's salary in case of disability D. It benefits the disabled employee only for the first year of disability E. It offers coverage when the employee's depended is disabled

C. It pays about 50%-70% of the employee's salary in case of disability

On average, out of every dollar spent by a company on employee compensation, more than _____ cents goes to employee benefits A. 75 B. 20 C. 15 D. 50 E. 30

E. 30

Under the Americans with Disabilities Act, which of the following employees is most likely to face legal challenges? A. An employer who had risk-based insurance and then hires an employee with a disability B. An employer who discriminates against workers over 40 in providing pay or benefits C. An employer who does not have risk-based insurance D. An employer who sets guidelines for using workers E. An employer who switches to a risk-based policy after hiring a disabled employee

E. An employer who switches to a risk-based policy after hiring a disabled employee

Which of the following is a requirement set for employers under the FASB standards? A. Benefits must not appear as future cost obligations B. Employers must fund benefits on a pay-as-you-go basis C. Employers should encourage employees to participate in management functions D. Financial statements should be made in such a way that outsiders cannot understand them E. Employers must set aside the funds they expect to need for benefits to be paid after retirement

E. Employers must set aside the funds they expect to need for benefits to be paid after retirement

Marshall finds that he meets the eligibility requirements for Social Security. He elects to receive retirement benefits at 62. In this case, which of the following is true A. He will not be eligible for workers' compensation B. His exempt amount limits will be lifted C. He will receive full retirement benefits D. He will receive retirement benefits only according to his earnings history E. He will receive benefits at a permanently reduced level

E. He will receive benefits at a permanently reduced level

T/F: Because benefits packages are more complex than pay structures, they are harder for employees to understand and appreciate

true

T/F: According to FASB, employers fund retirement benefits on a pay-as-you-go system

false

T/F: Tax laws generally make benefits unfavorable to employees

false

T/F: The funding for unemployment insurance comes from federal and state taxes on employees

false

T/F: Tuition reimbursement programs offered by certain organizations cover the tuition and other related expenses of their workers' children

false

T/F: Under the workers' compensation laws, employees are eligible to receive their regular paycheck in the event of a disability

false

T/F: Employees and applicants often have a poor idea of what benefits they have and wha the market value of their benefit is

true

T/F: The use of wellness programs and consumer directed health plans in an organization reflects its objective of controlling the cost of healthcare benefits

true

T/F: According to the Americans with Disabilities Act, employers are required to take care not to discriminate against workers over the age of 40 in providing pay or benefits

false

T/F: All U.S. employees, including federal, state, and local government employees, are covered under the Old Age, Survivors, Disability, and Health Insurance Program

false

T/F: Benefits provided to domestic partners of employees have the same tax advantages as benefits provided to their spouses

false

T/F: Employees who are parents always need child care and family leave

false

T/F: Employers in the United States are legally required to provide 30 days of paid vacation to both new and existing employees every year

false

T/F: Health maintenance organizations charge patients half the fee for each visit and service

false

T/F: Social security benefits increase if a worker earns wages above the exempt amount

false

T/F: According to Employee Retirement Income Security Act (ERISA), employees whose contributions are vested meet the requirements to receive a pension at retirement age

true

T/F: Employees and job applicants often have a poor idea of what benefits they have and what the market value of their benefits is

true

T/F: Employees are most likely to benefit from a flexible spending account if they have predictable health care expenses such as insurance premiums

true

T/F: The Family and Medical Leave Act of 1993 requires organizations with 50 or more employees within a 75-mile radius to provide as much as 12 weeks of unpaid leave to qualifying employees

true

Linda, who is pregnant, works for an organization with more than 100 employees. She lives 20 miles away from work. By federal law, she is entitled to _____ of unpaid leave after her child is born. A. 12 weeks B. 56 days C. 12 days D. 11 months E. 30 weeks

A. 12 weeks

John is the owner of The Round, a restaurant. He decides to increase employee motivation by introducing benefit packages. However, Nina, the manager, suggests that employees will be more motivated if John increases their actual wages. Which of the following statements, if true, strengthens Nina's argument? A. Benefit packages are more difficult to understand by employees than pay structures. B. The state has introduced mandatory requirements for employee benefits C. Employees do not prefer cash compensation due to higher taxes in the state D. Most of the employees at The Round belong to the age group that looks forward to pensions E. John's competitor, Mark, gives many benefits to his employees

A. Benefit packages are more difficult to understand by employees than pay strucutres

Which of the following is an advantage of cafeteria-style plans? A. Employees can get a better understanding of the value of benefits provided B. Since employees will select the benefits that they need the most, it reduced the overall costs C. When companies provide cafeteria-style plans, they do not have to pay unemployment insurance tax D. Employees do not have to select their individual plans E. They have lower administrative costs

A. Employees can get a better understanding of the value of benefits provided

Which of the following is an advantage of a qualified plan in retirement benefits A. Immediate tax deductions for the funds employees contribute to the plan B. Exemption of contribution from employees C. Taxable earnings on the money in the retirement fund D. A retirement plan that provides benefits exclusively to its owners and top managers E. Tax-free withdrawals for highly compensated employees

A. Immediate tax deductions for the funds employees contribute to the plan

Which of the following federal laws increased the responsibility of pension plan trustees to protect retirees? A. The Employee Retirement Income Security Act (ERISA) B. The Fair Labor Standards Act (FLSA) C. The American Disabilities Act (ADA) D. The Consolidated Omnibus Budget Reconciliation Act (COBRA) E. The Age Discrimination in Employment Act (ADEA)

A. The Employee Retirement Income Security Act (ERISA)

Jacob is a new father. His company helps Jacob by collecting information about the cost and quality of available child care. The company also provides Jacob with 12 weeks of unpaid leave. Which of the following is true of the child care provided by Jacob's company? A. The child care provided by the company is at the lowest level of involvement B. According to the Patient Protection and Affordable Care Act, the company has exceeded the level of involvement that is permissible C. The child care provided by the company is at the highest level of involvement D. According to the Family and Medical Leave Act, the company has not provided Jacob adequate child care E. The child care provided by the company is a form of a dependent care assistance plan

A. The child care provided by the company is at the lowest level of involvement

Steve and Cathy are managers at an advertising firm. Steve proposes that the company adopt defined- benefit plans to attract and retain its employees, and Cathy opposes his view. Which of the following statements will strengthen Steve's argument? A. The firm employs experienced, older people B. All the employees are under the age of 30 C. The firm employs young and creative minds D. The nature of work demands college graduates E. The firm mainly employs freelancers

A. The firm employs experienced, older people

Which of the following is function of elder care benefits offered by organizations? A. They provide information, referrals, and support B. They provide vouchers and discounts to help employees access the existing elderly care facilities C. They provide tax exemptions on medical bills of the dependent elders D. They set up elderly care facilities close to the workplace E. They provide direct financial assistance

A. They provide information, referrals, and support

Which of the following is characteristic of benefits required by the Social Security Act? A. Workers are compensated according to their past earnings and retirement age B. Workers receive increased benefits when they earn more than the exempt amount C. The program benefits persons who are financially dependent on current workers D. Workers receive no benefits until they reach the full retirement age E. The cost of the program is born entirely by the employers, who pay a payroll tax

A. Workers are compensated according to their past earnings and retirement age

Ron, the manager of a shipping company, introduces a set of communications, activities, and facilities designed to change health-related behaviors in ways that reduce health risks and subsequent medical costs. The program aims at specific health risks, such as high blood pressure, high cholesterol levels, smoking, and obesity, He has introduced a(n) _____. A. employee wellness program B. managed care program C. preferred provided program D. health maintenance organization plan E. consumer-driven health program

A. employee wellness program

Grey Inc. is a start-up located in Orlando. It offers highly beneficial pension plans to its employees. Which of the following categories of employees is the company most likely to attract through its pension benefits? A. Older people B. young people C. disabled workers D. women of childbearing age E. unmarried people

A. older people

Which of the following factors is considered while calculating the retirement benefit levels under a defined benefits retirement plan? A. Number of unused leaves at the end of the retirement year B. Employees' years of service, age, and earnings level C. The state where the person was employed during the retirement year D. Number of dependents E. Average earning during the last 20 years of employment

B. Employees' years of service, age, and earnings level

Which of the following must be true for a pension plan to be deemed a qualified plan? A. It should include elder care and child care B. It must not discriminate in favor of an organization's highly compensated employees C. It must not be a cafeteria-style plan D. It has to be defined-benefit plan that requires most of the funding to come from the employer E. It has to be a defined-contribution plan

B. It must not discriminate in favor of an organization's highly compensated employees

Which of the following is an example of a defined-contribution pension plan? A. Unfunded PBGC plan B. Money purchase plan C. Flexible spending account plan D. Cost-sharing plan E. consumer-driven pension plan

B. Money purchase plan

Which of the following actions help organizations reduce the cost of health care benefits offered to employees? A. Expanding the coverage for different types of claims B. Shifting from traditional health insurance plans to PPOs and CDHPS C. Selecting traditional health insurance over HMOs and PPOs as a preferred option D. Paying some or all of the difference in cost between an HMO or PPO plan E. Increasing the amount employers pay for deductibles and coinsurance

B. Shifting from traditional health insurance plans to PPOs and CDHPs

During a meeting to discuss ways to cut costs on benefit packages, the Vice President of the company, Harold, suggests getting long-term disability insurance for all employees. Alexis, HR manager, disagrees with him stating that short-term disability coverage is more advantageous. Which of the following supports Alexis' statement? A. The nature of work is such that the level of risk involved is high and injuries could be permanent B. Short-term disability plans limit maximum coverage in a month, which makes them more affordable for the company C. Long-term disability coverage does not have any limits on the amount to be paid each month to employees D. The majority of the workforce is middle-aged and prefers long-term coverage E. Short-term disability coverage is offered by few employers, which leads to a competitive advantage

B. Short-term disability plans limit maximum coverage in a month, which makes them more affordable for the company

Which of the following is true of unemployment insurance? A. Costs for unemployment insurance is standard across the country B. Unfavorable experience ratings of employers lead to higher premiums C. Most funding for unemployment insurance is provided by employees D. It is a voluntary program based on number of employees in a specific state E. It provides payments to offset lost income during voluntary unemployment

B. Unfavorable experience ratings of employers lead to higher premiums

Contrary to Western European countries, the United States has no legal requirements regarding employee _______. A. pension plans B. paid vacation time C. Social Security benefits D. 401k contributions E. unemployment insurance

B. paid vacation time

Research asking employees about their benefits has shown that employees: A. prefer cash compensation over benefits B. significantly underestimate the cost and value of their benefits C. understand the value of benefits without assistance from employers D. only want their companies to provide them with cafeteria-style plans E. want health care professionals to be chosen by the organization

B. significantly underestimate the cost and value of their benefits

Two management students, Frank and Neil, discuss the pros and cons of employee benefits. Frank states that unemployment insurance is more advantageous to employees than it is to employers, while Neil argues that employers receive more rewards from it. Which of the following weakens Neil's argument? A. Unemployment insurance provides employers a competitive advantage in the talent market B. Unemployment insurance does not include payment to offset lost income during voluntary unemployment C. Federal and state taxes paid by employers fund most unemployment insurance D. Unemployment insurance does not provide assistance to unemployed workers looking for new jobs E. The amount of an employer's unemployment insurance tax depends on the number of employees

C. Federal and state taxes paid by employers fund most of unemployment insurance

Under the Older Workers Benefit Protection Act of 1990, which of the following guidelines must employers follow when asking employees to sign early-retirement waivers? A. Allow employees no more than 48 hours before signing the retirement agreement B. Provide employees with an annual bonus and health insurance after the retirement C. Inform employees that they may consult with a lawyer before signing D. Make Age Discrimination in Employment Act (ADEA) waivers compulsory E. Provide lesser benefits than would otherwise be available upon retirement

C. Inform employees that they may consult with a lawyer before signing

Ray Inc., a shoe manufacturer in Virginia, opens a new facility in Texas. Shelly, the operations manager, prefers to give the new employees better wages than benefit packages. Tanya, the HR manager, disagrees with her. Which of the following, if true, will strengthen Tanya's argument? A. Benefits give lesser control over the advantages they receive from them than wages B. Different employees look for different types of benefits , which makes HR's tasks difficult C. The income tax rate is higher in Texas than it is in Virginia D. Higher cash compensation gives employees more purchasing power in Texas E. Benefits are more complex to understand by employees than pay structure

C. The income tax rate is higher in Texas than it is in Virginia

Which of the following is a function of elder care benefits offered by organizations? A. They provide vouchers and discounts to help employees access the existing elderly care facilities B. They provide tax exemptions on medical bills of the dependent elders C. They provide information, referrals, and support D. They set up elderly care facilities close to workplace E. They provide direct financial assistance

C. They provide information, referrals, and support

Rita, who recently moved to a new city, evaluates several job offers. Owing to her recent medical issues, she wants to choose a health care provider and not rely on the providers in a specific insurance network. Which of the following health care plans is Rita most likely to find suitable for her needs? A. an employee wellness program B. a managed care plan C. a preferred provider organization D. a flexible spending account E. a health insurance organization

C. a preferred provider organization

In the U.S., the amount of sick leave given to employees is often based on______ A. union contracts B. position within the company C. tenth of service D. educational background E. prior job experience

C. tenth of service

Most organizations offer _______ to encourage learning and attract the kinds of employees who wish to develop their knowledge and skills A. pension plans B. quarterly promotions C. tuition reimbursement programs D. medical insurance plans E. paid vacations

C. tuition reimbursement programs

In which of the following situations will workers become eligible for unemployment ? A. When they are discharged because of willful misconduct B. When they have worked only for a few days C. When they are actively seeking work D. When they are out of work because of a labor dispute D. When they are out of work because of labor dispute E. When they are out of work because they are sick

C. when they are actively seeking work

Which of the following is a similarity between unemployment insurance benefits and workers' compensation benefits? A. Both the programs are funded by the federal taxes on employees B. Both the programs replace the same percentage of an individual's previous earnings C. Both the programs provided the same amount of compensation to the employees D. Both the programs' costs depend on the organization's experience ratings E. Both the programs have the same funding costs across the states

D. Both the programs' costs depend on the organization's experience ratings

Which of the following is true of child care? A. Child care should be limited to provision of leaves to employees B. At the highest level of involvement, organizations provide vouchers or discounts for employees to use at existing child care facilities C. Child care must indicate death benefits for it to be considered as a qualified plan D. Companies that provide child care facilities face liabilities concern E. Provision of child care is mandatory under the Family and Medical Leave Act

D. Companies that provide child care facilities face liability concerns

Which of the following is legally required by an organization while offering early retirement incentives? A. Asking female employees to pay more to defined-benefit plans B. Providing employees no more than 48 hours to make an early retirement decision C. Asking employees to sign compulsory waiver under ERISA D. Ensuring there is no coercion to force employees to retire E. Setting an age at which retirement benefits stop growing

D. Ensuring there is no coercion to force employees to retire

Which of the following is true of short-term disability insurance? A. Only employees who have been with an organization for less than two years are eligible for short-term disability insurance B. It is only provided to those individuals who work part time C. It pays the double the full salary of a disabled employee for a period of two months D. It pays a portion of a disabled employee's salary as benefits for up to 6 months E. It pays the full amount of a disabled employee's salary for a minimum period of one year

D. It pays a portion of a disabled employee's salary as benefits for up to 6 months

Jack has to decide between two jobs that provide equal pay. He decides to compare the healthcare benefits provided by both jobs to arrive at a decision. He wants to choose the job that offers him a flexible spending account over the job that offers him managed care. Which of the following, if true, strengthens his decision? A. In flexible spending accounts, employees will get back that money they do not spend B. To avoid taxation of the money in a flexible spending, the money must meet IRS requirements C. Flexible spending account is not helpful if employees have unpredictable health care expenses D. Money in flexible spending accounts is not taxed, so employees get more take-home pay E. With managed care, the insurer makes decisions about health care, which helps avoid unnecessary procedures

D. Money in flexible spending account is not helpful is not taxed, so employees get more take-home pay

In a meeting to discuss pension plans, management decides to offer retirement plans exclusively to the organization's owners and top managers. Steven, one of the top managers, disagrees with this decision because he believes the company can benefit more by providing pensions to a broad range of employees. Which of the following strengthens Steven's belief? A. Extending pension plans to employees at all levels will increase triple the costs B. A top-heavy plan requires faster vesting for non-key employees C. Pension plans are determined exclusively by state and federal laws D. Nondiscrimination rules provide tax benefits to plans that do not favor the organization's highly compensated employees E. The IRS provides more favorable tax treatment of benefits when hey are offered to a broad range of employees

D. Nondiscrimination rules provide tax benefits to plans that do not favor the organization's highly compensated employees

An organization employs, Rick, a bilateral amputee, to work as a research analyst. When Sara, the organization's chief advisor, becomes aware of this, she argues that the organization is going to experience legal challenges. According to the Americans with Disabilities Act, which of the following will strengthen Sarah's argument? A. The organization does not have a risk-based insurance B. The organization switches to a risk-based policy after hiring Rick C. The organization plans to stop Rick's benefits when he reaches the age of 50 D. The organization has a risk-based insurance in place before recruiting Rick E. The organization gives equal access to Rick as other employees

D. The organization switches to a risk-based policy after hiring Rick

Jim is the CEO of a company that is expanding overseas. He considers introducing a cafeteria-style benefits plan to cater to the company's diverse workforce. However, the HR team brings up the concern of higher expenses involved in this type of benefits. Which of the following is Jim likely to do to lower costs at the initial stage? A. Opt for communication methods that do not stress the value of each benefit B. Avoid standardized plans available for employers opting for cafeteria style benefits C. Encourage employees to choose benefits they need the most D. Use software packages to design the plan E. Discourage employees from choosing lower cost options

D. Use software packages to design the plan

Laura, HR manager at a tech company, is responsible for administering the company benefits program. The employee benefits package will undergo several significant changes at the start of the new year. Which of the following would be an effective strategy to share the changes with employees? A. Issue a revised employee handbook B. Ask the CEO to say a few words about the changes at the company holiday party C. Mention the changes to a few employees and hope they spread the word D. Say little about the changes E. Set up Q&A sessions with each department to discuss the changes

E. Set up Q&A sessions with each department to discuss the changes

Which of the following benefits provided by employer is required by law in the United States? A. Personal leave B. Paid vacation C. Flextime D. Retirement savings plan E. Social Security

E. Social Security

_______ strictly limits the definition of "independent contractors" so that employers cannot avoid legal obligations by classifying workers as self-employed when the organization receives the benefits of a permanent employee. A. The Employee Retirement Income Security Act B. Employee Benefit Research Institute C. The Bureau of Labor Statistics D. The Consolidated Omnibus Budget Reconciliation Act E. The Internal Revenue Service

E. The Internal Revenue Service

Under the Family and Medical Leave Act, which of the following criteria makes employees eligible to take unpaid family leave? A. They should be working for an organization with at least 100 employees B. They should have worked for the employer for more than 5 years C. They should have worked at least 15 hours per week D. They should belong to the top 10 percent of highest paid executives E. They should be working for an organization with 50 or more employees within a 75-mile radius

E. They should be working for an organization with 50 or more employees within a 75-mile radius

James is the founder of a new start-up company. He hires mostly young employees who are fresh out of college. He finds that most of his employees are willing to develop their knowledge and skills and would like to take up courses to improve themselves. Which of the following programs is James most likely to use in order to encourage this behavior? A. Short-term vesting program B. Employee wellness program C. Worker's compensation program D. Mature education program E. Tuition reimbursement program

E. Tuition reimbursement program

Sick leave programs: A. must be provided by all employers according to the law B. are based solely on the age of employees C. are forms of floating holidays D. are mandatory forms of unpaid leave E. pay employees for days not worked due to illness

E. pay employees for days not worked due to illness