MAN3301

In the United States, what is the legal requirement for giving employees paid vacation?

U.S. law lets employers decide on paid time off; there is no minimum.

Which of the following is an example of a defined-contribution pension plan?

money purchase plan

63. Under a 401(k) plan, the _____ is responsible for choosing specific investments. A. employee B. PGBC C. ERISA fiduciary advisor D. financial institution handling the account E. employer

a

89. Which of the following strategies can be legally adopted by organizations looking to restructure the workforce to minimize the expense of benefits? A. using more independent contractors rather than hiring additional employees B. limiting the coverage on life insurance based upon an employee's age C. using more full-time rather than part-time employees D. recruiting new employees instead of demanding overtime from existing employees E. substituting HMO and PPO plans with traditional health insurance plans

a

91. 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. taxable earnings on the money in the retirement fund C. tax-free withdrawals for highly compensated employees D. exemption of contribution from employees E. a retirement plan that provides benefits exclusively to its owners and top managers

a

78. According to your text, a logical place to begin selecting employee benefits is to establish _____ for the benefits package. A. a basic hierarchy B. limits C. costs D. goals E. objectives

e

Jack has to decide between two jobs that provide equal pay. He decides to compare the health care 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 statements best supports Jack's preference?

Money in flexible spending accounts is not taxed, so employees get more take-home pay

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?

Social Security

Steve, the vice president of Ocher Inc., plans to introduce a retirement plan for all employees. George, the operations director, disagrees because the proposed plan would increase the company's costs. Which of the following, if true, strengthens Steve's argument?

Some benefits have become so common that today's employees expect them.

Old Thyme Manufacturing offered employees a defined-benefit retirement plan, in which retirees received benefits calculated on the basis of their age, earnings, and years of service. But the company didn't keep up with technology, and its earnings fell. When the stock market dipped, the company found that it couldn't afford to keep up with paying for its retirement benefits. What protection will the retirees have in this situation?

The Pension Benefit Guarantee Corporation will provide them with a basic benefit.

Which of the following is a true of unemployment insurance?

Unfavorable experience ratings of employers lead to higher premiums.

Which of the following is characteristic of benefits required by the Social Security Act?

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

102. Which of the following actions related to benefits can best give employers an advantage in the labor market? A. teaching employees about the value of their benefits B. limiting benefits to a few simple options C. explaining complex benefits with sophisticated language D. keeping messages about benefits basic and uncreative E. simplifying messages about benefits by delivering them through one medium

a

65. Which of the following organizations benefits when switching from a defined-benefit plan to cash balance plans? A. organizations with many experienced employees B. organizations with a few skilled employees C. organizations with many young employees D. organizations with many retired employees E. organizations with highly skilled, young employees

a

68. 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. top-heavy B. multiemployer C. special draw rights D. deferred E. defined-contribution

a

70. Jacob is a new father. His company helps Jacob by collecting information about the cost and quality of available child care. 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. The child care provided by the company is at the highest level of involvement. C. According to the Family and Medical Leave Act, the company has not provided Jacob with adequate child care. D. According to the Patient Protection and Affordable Care Act, the company has exceeded the level of involvement that is permissible. E. The child care provided by the company is a form of a dependent care assistance plan.

a

72. Helen is a marketing manager at a local equipment manufacturer. She and her husband know that saving for college for their 4-year-old twin boys is a challenge. Her employer recently implemented a college tuition plan that lets parents and other family members defer taxes on their contributions to the plan. What is the type of plan recently implemented? A. 529 savings plan B. 401k savings plan C. 207 college tuition plan D. U.S. saving bonds plan E. TD Ameritrade college tuition plan

a

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

a

76. 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 courses to improve themselves. This additional knowledge would benefit James' company, so he decides to encourage this behavior. Which of the following programs is James most likely to use in order to do so? A. tuition reimbursement program B. employee wellness program C. worker's compensation program D. short-term vesting program E. mature education program

a

90. _____ 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 Internal Revenue Service B. The Consolidated Omnibus Budget Reconciliation Act (COBRA) C. The Employee Retirement Income Security Act (ERISA) D. Employee Benefit Research Institute E. The Bureau of Labor Statistics

a

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

a

93. 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. Nondiscrimination rules provide tax benefits to plans that do not favor the organization's highly compensated employees. B. The ADEA provides more favorable tax treatment of benefits when they are offered to a broad range of employees. C. A top-heavy plan requires faster vesting for non-key employees. D. Extending pension plans to employees at all levels will triple the costs. E. Pension plans are determined exclusively by state and federal laws.

a

96. 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. Inform employees that they may consult with a lawyer before signing. B. Allow employees no more than 48 hours before signing the retirement agreement. C. Make Age Discrimination in Employment Act (ADEA) waivers compulsory. D. Provide lesser benefits than would otherwise be available upon retirement. E. Provide employees with an annual bonus and health insurance after the retirement.

a

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

a

50. Rita, who recently moved to a new city, evaluates several insurance options from her new employer. Owing to her recent medical issues, she wants to choose her health care providers, even if seeing them costs more than seeing 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 preferred provider organization

98. An organization employs Rick, a bilateral amputee, to work as a research analyst. When Sarah, 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 has a risk-based insurance in place before recruiting Rick. B. The organization plans to stop Rick's benefits when he reaches the age of 50. C. The organization switched to a risk-based policy after hiring Rick. D. The organization gave Rick access to the same health insurance that is provided to the other employees. E. The organization does not have a risk-based insurance.

c

105. Gabriela, an HR manager, and her staff devote long hours to planning and running a "benefits fair," where employees can view displays and ask questions about the various parts of the company's benefits package. The following week, the marketing manager asks if the effort was worthwhile. Gabriela says it was. What is the most likely reason for Gabriela's opinion? A. It lowered the cost of communicating with employees, because now the company doesn't need to use printed media. B. It lowered the cost of providing benefits, because employees know what to sign up for. C. It increased employees' commitment to saving for retirement, so they won't need Social Security. D. It increased employees' happiness and job commitment, so they are more fun to be around. E. It increased employees' commitment and satisfaction, so they contribute more to the company.

e

73. Noah, a human resource manager, learns from employee surveys and conversations that many employees are struggling with the needs of aging parents. He decides to investigate offering elder care benefits. What could these benefits include? A. a 529 savings plan to save money for long-term care facilities B. providing professional caregivers and nursing care C. vacation days and sick leave D. paid time off and part-time jobs for the parents E. flexible hours and decision support from experts in geriatric care

e

77. Employee benefits at Great Nile, an online retailer, include a basketball team, a gym, and an on-site massage therapist. In what way are these benefits most likely to support the company's business goals? A. by meeting the standards of most U.S. businesses B. by making the workplace more family-friendly C. by protecting the company against charges of employment discrimination D. by complying with legal requirements for benefits E. by helping employees cope with demanding, high-stress jobs

e

79. Stan, the CEO of a company, considers dropping medical insurance from the list of benefits provided to employees. Alisha, the operations director, disagrees with Stan by stating that medical insurance is a high-value benefit. Which of the following supports Alisha's statement? A. Companies that do not provide medical insurance cannot have their retirement plans considered as qualified plans. B. Most employees do not appreciate what health insurance costs the employer. C. Medical insurance plans do not cover mental illness. D. A health insurance rate is higher than a general insurance rate. E. Employees usually realize that surgery or a major illness can be financially devastating.

e

80. Isaiah, an HR manager, conducted a survey to learn which benefits employees value the most. He discovers that the survey results will be difficult to apply. What is the most likely reason? A. Employees expect to receive benefits that are legally required and widely available. B. Software is the only method employees will accept to help them choose their benefits. C. The costs of turnover at Isaiah's company are high. D. The employees only value medical insurance. E. Employees have very different opinions about what they value.

e

87. Bilge Makers Unlimited has a goal to lower the cost of employee benefits. Its human resource department compares the costs of its benefits with averages published by the Bureau of Labor Statistics, the U.S. Chamber of Commerce, and other sources. The investigation shows that its cost for workers' compensation insurance is high relative to other companies. Which of the following actions could best help Bilge Makers accomplish its goal? A. accept the high cost and look for other areas in which to reduce spending B. replace the workers' compensation insurance with disability insurance C. shop for a better deal on workers' compensation insurance D. cancel the workers' compensation insurance E. improve safety to lower the company's experience rating

e

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

e

94. Mario, a production worker, complains to a human resource professional at his company that when he asked his supervisor for a week off to care for his son after surgery, the supervisor replied, "Can't your wife do that instead?" Which of the following statements best summarizes what the HR professional should explain to the supervisor? A. Benefits apply whether a spouse is of the same or the opposite sex. B. Females may not be required to contribute more than men to defined-benefit plans. C. Fatherhood is a protected category in the antidiscrimination laws. D. Mario has not yet used all of his sick leave. E. Equal employment opportunity requires that access to benefits not be limited by sex.

e

99. Which of the following is a requirement set for employers under the Financial Accounting Standards Board standards? A. Employers must fund benefits on a pay-as-you-go basis. B. Benefits must not appear as future cost obligations. 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

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. Based on these offerings, Ron has introduced a(n) _____.

employee wellness program

Which of the following factors is considered while calculating the retirement benefit levels under a defined benefit retirement plan?

employees' years of service, age, and earnings level

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?

he will receive benefits at a permanently reduced level

Sarah's employer provides her with an insurance plan that requires her to obtain approval before being admitted to the hospital for surgical procedures. Which variation of health coverage does this illustrate?

managed care

Which of the following is an advantage of providing benefits instead of cash compensation?

Employers can assemble creative benefits packages that give them a competitive advantage.

Which of the following is true of short-term disability insurance?

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

56. Which of the following is true about disability insurance?

It pays about 50% to 70% of the employee's salary in case of disability

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.

12 weeks

On average, out of every dollar spent by a company on employee compensation, more than _____ cents goes to employee benefits.

30

Kelly, a new employee, learns her company provides a group insurance plan that she can enroll in. Her friend, Michael, suggests that Kelly would be able to save money if she chooses to purchase an individual insurance plan over the company's group insurance plan. Which of the following weakens Michael's argument?

Rates for group insurance are typically lower than those of individual policies

John is the owner of the restaurant, The Round. 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?

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

Which of the following is a similarity between unemployment insurance benefits and workers' compensation benefits?

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

Ian is the human resource manager of a one-year-old technology company. The founder wants him to set up a retirement plan. Ian thinks the best approach during the company's early years would be a defined-contribution plan funded with profit-sharing dollars. Which statement best supports Ian's idea?

Contributing a share of profits gives the company more flexibility as it establishes itself.

30. As Ray Inc., a shoe manufacturer, grows more profitable, it wants to become more competitive as an employer in the labor market. Tanya, the human resource manager, urges the company to develop a more attractive package of benefits, rather than simply raising salaries. Which of the following statements best supports Tanya's argument?

Employees do not pay income taxes on most benefits they receive

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?

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

Nick, the HR manager at a start-up company, helped the founder plan a benefits package that includes paid vacations, holidays, and sick leave. Now an employee approaches Nick to say she has been called up for jury duty and needs to be away next week. What should Nick do?

He should establish, and then apply, policies for other situations requiring time off.

82. Benefit plans that permit employees to choose the types and amounts of benefits they want from a set of alternatives are called A. preferred provider plans. B. cafeteria-style plans. C. defined-benefit plans. D. flexible spending accounts. E. cash balance plans.

b

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

b

45. In the U.S., the amount of sick leave given to employees is often based on _____.

length of service

Contrary to Western European countries, the United States has no legal requirements regarding employee _______.

paid vacation time

Sick leave programs

pay employees for days not worked due to illness.

Nina works at Gia Inc., which provides her with a health care plan that contracts with health care professionals to provide services at a reduced fee. Which type of health care plan is Gia providing to its employees?

preferred provider organization

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 for the company. Which of the following supports Alexis' statement?

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

Which of the following benefits provided by employer is required by law in the United States?

Social Security contributions

Under the Family and Medical Leave Act, which of the following criteria makes employees eligible to take unpaid family leave?

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

101. Which of the following is true of employee benefits? A. Employees have a thorough understanding of what benefits they have and what the market value of these benefits is. B. Employees have a hard time understanding the cost and value of their benefits. C. It is up to employees to determine the cost and value of their benefits. D. Employees, for the most part, are just not interested in their benefits. E. Employers have very limited options for communicating information about benefits.

b

64. Which of the following is true of a cash balance plan? A. All contributions to the plan come from the employee. B. The money earns interest at a predetermined rate, such as the rate paid on U.S. Treasury bills. C. Older employees with many years of service benefit to a greater degree than do younger workers just starting their careers. D. It penalizes employees for changing jobs. E. Employees cannot predict retirement benefits under cash balance plans.

b

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

b

84. Ravi is the CEO of a magazine publishing company. He wants to provide benefits for his employees, but would still like to control his company's costs. Jess, the head of the HR department, suggests implementing a cafeteria-style plan. What would be the most likely benefit of Ravi doing so? A. He will save time by using software packages to offer benefits packages. B. He will avoid the cost of providing employees with benefits they don't value. C. Having a non-standardized plan will make Ravi's company seem cutting-edge. D. Employees of the company, including Ravi, will be given more vacation days. E. Costs will be easy to estimate since all benefits options will be taken into consideration.

b

66. Steve is a human resource manager at an advertising firm. Steve proposes that the company adopt defined-benefit plans to attract and retain its employees. In which situation will this benefit be most valuable to the firm's employees? A. all the employees are under the age of 30 B. the nature of work demands college graduates C. the firm employs experienced, older people D. the firm employs young and creative minds E. the firm mainly employs freelancers

c

81. 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. women of childbearing age B. disabled workers C. older people D. young people E. unmarried people

c

85. 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. use software packages to design the plan D. discourage employees from choosing lower-cost options E. encourage employees to choose benefits they need the most

c

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

c

Beckwith Corporation has a benefits package that includes paid vacations and sick leave. The human resource manager proposes shifting this time into a bank of paid time off. What would be an advantage of this change?

employees have more flexibility and privacy for their personal matters

53. Matt has a health care plan that provides him coverage in such a way that allows him to be involved in making decisions to help lower costs. This plan typically includes insurance with a high deductible, a medical savings account, and ongoing health education. Which type of health care plan is Matt using?

consumer-driven health plan

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

d

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

d

86. How do cafeteria-style plans increase costs for employers? A. Employers pay much higher premiums for an HMO than a preferred health care plan. B. Employers are required to pay higher insurance premiums for laid-off workers. C. Contributions to PGBC to fund the retirement plan increases under this plan. D. Employees select the kind of benefits they expect to need the most. E. Employers bear the cost of providing employees with benefits they do not value.

d

100. Organizations must communicate benefits information to employees so that they will A. be motivated to work harder. B. choose the least-expensive benefits package. C. be legally liable in an employee lawsuit. D. be informed of future career opportunities within the organization. E. appreciate the value of their benefits.

e

103. Martin, the HR vice president at Ace Trucking, evaluates responses from an employee survey and questions at the company's annual benefits presentation. He concludes that many employees are confused about their options for health insurance and often unhappy with the policy they choose. What should Martin do about this situation? A. accept that it is difficult for employees to understand the value of insurance B. save money by reducing printed messages about health insurance C. downplay the role of health insurance in the benefits package, relative to other benefits D. discontinue health insurance, since it is a source of dissatisfaction E. introduce software that will guide employees to the insurance option for their needs

e

104. 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 to new employees B. mention the changes to a few employees and hope they spread the word C. say little about the changes D. ask the CEO to say a few words about the changes at the company holiday party E. set up Q&A sessions with each department to discuss the changes

e

69. FastForward Technology depends heavily on a workforce of software engineers, systems analysts, and coders. Which statement best explains why FastForward would offer its employees paid maternity and paternity leave? A. Only 13% of workers currently have paid family leave. B. Most industrialized nations provide this type of employee benefit. C. Management doesn't want exhausted workers in the office. D. These benefits are required by the Family and Medical Leave Act. E. It makes the company more attractive to workers who are in high demand.

e

Kelsey, the engineering manager at Tek Solutions, takes an eight-week unpaid leave to go on a tour to promote a book she wrote. She does so in accordance with Tek Solutions' policy for leaves without pay. In what sense could this unpaid leave be an employee benefit for Kelsey?

she retains her seniority and benefits during the leave

Which of the following federal laws increased the responsibility of pension plan trustees to protect retirees?

the Employee Retirement Income Security Act (ERISA)

In which of the following situations will workers become eligible for unemployment benefits?

when they are actively seeking work