Payroll Administration Ch 3 Interactive Reading
In what year did the U.S. Department of labor begin investigating employee classifications for FLSA compliance?
2015
In which of the following situations would hourly wage calculations be appropriate?
A nonexempt employee who works 75 hours during a biweekly pay period. A nonexempt salaried worker who works more than 40 hours during a weekly period.
The payroll register contains which of the following?
A separate row for each employee.
What is the definition of a combination pay method?
An employee may be compensated using more than one pay basis.
Which of the following are potential issues with payroll draws?
Correct amounts of payroll taxes may not be collected. The draw may affect legal salary deductions like garnishments
Using the hundredth-hour system, how are the fractions of hours determined?
Divide the number of minutes worked by 60
For employees who work in more than one separate function within a company, the payroll accountant should refer to the _________________ overtime calculator advisor published by the U.S. Department of Labor.
FLSA
True or false: Outside sales representatives are subject to FLSA minimum wage provisions
False
True or false: Travel time is compensable when it is for the employee's benefit.
False
Which columns must be present in every payroll register?
Gross pay Employee name Marital status
Which type of sales representative is sometimes covered by the Fair Labor Standards Act's minimum wage provisions?
Inside sales
When an employee serves as a jury member for court cases, how much is the employer required to pay them?
It is at the discretion of the employer
Which of the following are columns used in the payroll register?
Marital status Gross pay Retirement plan deductions
Which of the following is true about compensatory time?
Private-sector employers may offer compensatory time in lieu of overtime. Compensatory time is legally mandated for salaried exempt public-sector employees.
Which of the following jobs may compensate employees on a salary plus commission basis?
Retail sales District manager Farm worker
According to the FLSA, which of the following is true about compensatory time?
Salaried exempt workers must receive comp time equal to 1.5 times the overtime hours.
Which of the following are examples of combination pay methods?
Salary plus commission Hourly plus piece-rate
Commissions are based on which one of the following?
Sales price that the consumer pays
What is an important consideration regarding the minimum wage provision of the Fair Labor Standards Act?
Separate tiers
What is true about on-call time at the employer's premises?
The employee's freedom is limited The number of on-call hours must be added to the employee's gross pay
Which of the following are true about FLSA provisions for piece-rate workers?
The employer must establish a standard number of items that may reasonably be completed Most piece-rate employees are subject to minimum wage, overtime, and break provisions
Which of the following is true about the hundredth-hour system?
The hour is divided into 100 increments
Which of the following is true of piece-rate pay?
The pay basis is agreed upon by the employee and employer. It encourages employee production.
Who is responsible for rounding employee time consistently?
The payroll accountant
Which of the following is true about the tipped employee minimum wage?
Tipped employees must earn enough in tips to meet FLSA minimum wage provisions. Each state has different regulations about tipped employee wage minimums.
Why is the tipped minimum wage lower than the non-tipped minimum wage?
Tipped workers may earn tips from patrons.
What is the purpose of a payroll draw?
To allow certain employees to draw against future earnings.
True or false: Employers should notify employees in advance if the employee's tip earnings will be included in their overtime pay calculation.
True
Full-time students may receive less than the FLSA minimum wage if they work for which type of employer?
University
When is a commission based employee not subject to FLSA minimum wage provisions?
When they are classified as an exempt worker
Computation of the pay for fractions of hours worked depends on
company policy.
Employees in highly technical or qualification-driven positions are generally classified as ______________ from FLSA provisions.
exempt
Employees whose positions are _____________ _____________ or ___________ ______________ may find their job classified as salaried.
highly technical qualification driven
Firms who do not engage in ____________ ______________ are not subject to the minimum wage provisions of the Fair Labor Standards Act.
interstate commerce
Among sales consultants, __________ _____________ ______________ are excluded from minimum wage requirements under the Fair Labor Standards Act.
outside sales representatives
The _____________ _____________ is the internal document used for accurate preparation of payroll.
payroll register
The two categories of hourly wages are _________________ and ______________________.
regular overtime
Commission-based pay is appropriate for __________________ _____________
sales personnel
A salaried employee who earns $42,000 annually and has a 35-hour standard workweek. What is their hourly wage?
$23.08
An employee who earns $11.50 per hour works 38.5 hours during a weekly period. What is the employee's gross pay?
$442.75
IRS guidelines stipulate that ______________ ______________prior to the employee's death must accurately reflect the work performed.
wages earned
An employee must be paid different rates when working in how many separate functions?
two
If an exempt salaried employee has a standard 40-hour workweek and earns $42,000 annually, what is their houly rate?
$20.19
What are the employer's responsibilities regarding piece-rate work?
Accurate tracking of work hours Payment of at least the minimum wage
In which of the following situations may an employee receive less than the FLSA minimum wage?
An employee below age 20 during the first 90 days of employment. Student learners in vocational education programs.
What types of employees may be required to wait for their employer as a required part of their travel time?
Chauffeur
Which of the following types of workers is specifically allowed by section 13(a)(1) of the Fair Labor Standards Act to be classified as a salaried exempt employee?
Chief Financial Officer Network administrator
Which of the following are reasons for tracking employee commissions?
Compensation accuracy Job order tracking Employee performance
If the employee is not restricted to performing on-call time on the employer's premises, which of the following is true?
Compensation is not required
Which of the following is true about piece-rate work?
Compensation must be at least equal to minimum wage.
The U. S. Department of ____________ established the minimum salaried wage as one of the tests of ___________ from FLSA provisions.
Labor exemption
Which of the following is not exempt from the minimum wage provisions of the Fair Labor Standards Act?
Legal firms
True or false: Hourly workers may be skilled or unskilled employees.
True
True or false: If an employee receives full compensation during jury duty, the employee may be required to return the jury duty pay.
True
To determine a salaried employee's hourly rate, divide the ___________ salary by the total __________ worked per year.
annual hours
In the case of retroactive pay, the Secretary of Labor may sue the employer for ____________ ______________plus an equal amount of ____________
back pay damages
An employee with a ____________ pay method may perform two or more different jobs for the same employer with different _____________ bases.
combination compensation
The minimum salaried wage applies to salaried nonexempt employees whose wages
do not exceed $455 per week
Many job types have a combination pay method because it boosts ________________ ________________ and maintains ________________________ ___________________
employee productivity FLSA compliance
Pension payments are subject to ______________ _____________ tax but not _________________ tax.
federal income FICA
Retired employees who receive pension payments are subject to
federal income tax
Unless specifically designated by a __________________ ___________________, private sector employers may not offer compensatory time.
firm's policies
The standard number of weekly hours for salaried nonexempt employees depends on the ___________________ ___________________
hiring agreement
FLSA uses the Eight and Eighty (8 and 80) rule for overtime pay for which of the following classifications of workers?
hospital workers residential care facility workers
When an employee works more than one job classification for a single employer, the payroll accountant must be informed of the
hours performed per classification classifications reporting from the department
Nonqualified deferred compensation refers to pay earned in one period and received in a ______________________ ______________
later period
Piece-rate pay may only be used for employees involved in the ________ part of a business.
manufacturing
Commission based pay is subject to the FLSA ____________ ______________ provisions of the Fair Labor Standards Act if the employee is classified as nonexempt.
minimum wage
On-call time refers to situations in which an employee must be available for work outside of _________ _______________ __________
normal working hours
Travel to and from an _____________ is not ____________ time.
office compensable
Overtime pay for piece-rate employees is based on the number of ___________ and the total number of productive _____________ worked.
pieces hours
The two most common ways to compute fractions of hours is by _______________ hour or by ______________________ hour.
quarter hundredth
Some employers will compensate employees by rounding to the nearest 15 minute interval, which is called the _________________ __________________ ________________
quarter hour system
Which of the following fractions of hours may companies use to compute hourly pay?
quarter-hour hundredth-hour
Rounding an employee's hours to the nearest 15-minute interval is called the variable-hour system.
quarter-hour system.
When the __________ minimum wage is lower than the federal minimum wage, the ______________ minimum wage prevails in most cases.
state federal
If the wages for a deceased employee are paid in a check, it must be made to out to
the employee's estate
Employers may pay less per hour than the federal minimum wage if
they do not conduct any interstate commerce in the course of business operations.
The difference between the tipped employee minimum wage and the federal minimum wage is known as the ____________ ____________.
tip credit
Wages for _____________ employees are lower than those for ______________ employees.
tipped nontipped
The hundredth-hour system divides the hour into ___________________ ________________
100 increments
Under the 8 and 80 rule, what is the number of consecutive workdays considered?
14
Employees who are over age _____ are not subject to a maximum number of hours worked per week.
16
The standard FLSA-stipulated overtime includes hours worked in excess of _____ during a 7-day, 168-hour week.
40 hours
Match the following start time with the nearest quarter of an hour that would be used for payroll purposes.
8:06am 8:00am 7:52am 7:45am 8:24am 8:30am 8:10am 8:15am
Match the following variables with their proper place in the formula to convert annual salary to hourly rate.
Annual salary - numerator Number of weeks per year - denominator
Computation of piece-rate pay involves
Multiplying the number of pieces completed by the rate per unit. Locating the rate earned per unit. Counting the pieces completed.
Under the FLSA provisions, the minimum wage applies to salaried nonexempt employees whose wages do not exceed _____ per week.
$913
Match the state with the correct minimum hourly wage.
Arizona $11.00 Georgia $5.15 Delaware $8.75 Louisiana None
Which of the following are examples of situations that would be appropriate for commission based pay?
Automotive sales personnel Music marketing
When an employee works more than one job classification, the payroll accountant is notified to ensure accurate ___________, ___________, and _______________.
pay classification reporting
Which of the following types of firms are exempt from the minimum wage provisions of the Fair Labor Standards Act?
Have less than $500,000 in annual volume Do not engage in interstate commerce
What is the purpose of adding payroll register columns such as commissions, number of holiday hours, and number of overtime hours?
It allows for future analysis of payroll costs.
Which of the following is true about commission pay?
It is a percentage of the sales price. Commissions may be contingent upon the return and warranty policy.
Which of the following methods could be used to notify payroll accountants of the compensation for an employee who works in more than one job classification?
Job duty notification forms Schedules from the supervisor Time card annotations
According to the FLSA, what are methods for receiving retroactive pay (select all that apply)?
The Department of Labor's Wage and Hour Division may provide supervision for the payment. The employee may sue the employer for the back pay plus damages, court costs, and lawyer's fees.
What are purposes of the salary plus commission pay method?
To meet minimum wage requirements To recognize employee contribution to sales
The payroll register is:
a tool to accurately prepare payroll
Nonqualified deferred compensation is taxed
like any other compensation
Piece-rate pay connects the amount of work completed with
manufacturing
Employers may consider the amount earned in tips by employees when computing _____ pay.
overtime
Incentive Stock Options (ISOs) allow employees to:
report a small base salary for tax purposes receive company stock for work performed
In a payroll draw situation, the employee may draw _____________ against _____________ ________________
salary future commissions
Situations exist in which nonexempt employees must be compensated at more than the _________________ _______________ premium.
standard overtime
A piece-rate employee who completes 150 pieces at a rate of $3.50 per piece has a gross pay of
$525
What should be obtained from an employee who requests a draw?
A written, signed authorization specifying repayment terms
In which situations may an employee continue to receive commissions after terminating employment?
Depending on state law
What is the standard work week for salaried nonexempt workers?
Depends on the hiring agreement
Which of the following is true about employee draw?
Employees are expected to generate enough sales to cover draws. The employee may draw against future earnings (which will be reduced) if sales goals are not met.
Which of the following types of employees may legally be paid less than the Federal minimum wage of $7.25/hour?
Employees who receive tips as a regular part of their job. Employees in a firm with no interstate commerce.
A nonexempt employee whose contracts stipulates a 45-hour workweek cannot receive overtime pay until working more than 45 hours.
False
Match the payroll register column with its definition.
Gross pay - The amount of employee pay before any deductions Number of withholdings - The number of allowances used to compute the employee's income tax Salary - The gross amount paid to exempt employees Hourly rate - The compensation basis for nonexempt employees
The difference between salaried and hourly workers has historically had more to do with ______________ ____________ than legal requirements.
company policy
ISOs allow employees to receive a small base salary and ________________ ___________________ for their compensation.
company stock
Piece-rate workers must have a ___________ _____________of items that may be ___________ _____________each day, including breaks and rest periods.
standard number reasonably completed
Piece-rate work involves paying employees for each ______________ that they complete or ____________ they perform.
unit action
