Compensation Chapter 9 - 15

What employment issue for flexible employees does the Walling v. A.H. Belo Corporation Supreme Court ruling address?

Fixed Weekly Pay

To be eligible for unemployment insurance benefits, an individual must meet which of the following requirements

Has not been terminated because of gross violations of workplace conduct.

Tuition reimbursement and day care assistance fall under which of the following categories?

Service Practices

The gap between productivity and real hourly compensation was 2.3 and 0.9 during which of the following periods?

2000-2011

Under a cliff vesting arrangement, after how many years must full vesting rights be granted?

3

A worker, who is considered part-time, works less than how many hours per week?

35

The SEC requires compensation information about the CEO and how many of the highest paid executives?

4

An international assignment is considered long-term when it lasts at least how long?

5 years

Under which law must former employees be given the choice to continue their coverage, as well as coverage for their spouses and dependents, for up to 18 months?

Consolidated Omnibus Budget Reconciliation Act

Ashley was working as a part-time employee in a private company and she received employer-sponsored health care. She has just been laid off. Under which act could she choose to continue receiving employer-sponsored health care insurance coverage?

Consolidated Omnibus Budget Reconciliation Act (COBRA)

Which of the following is a limitation of engaging contingent workers?

Contingent workers' productivity, if not employed long enough, rates low.

Since the cost of benefits has risen so dramatically in recent years, the majority of the companies decided to finance discretionary benefits using which of the following methods?

Contributory financing

Which of the following refers to payments an individual makes as a condition of receiving medical services?

Copayments

What is another name for health maintenance organizations (HMOs)?

Prepaid medical services

What type of test is used to determine if an independent contractor is financially dependent?

Economic Reality

How often will Jill receive an unemployment check?

Weekly

Canada can best be defined as which of the following?

constitutional monarchy

Which of the following is NOT a provision of the Employee Retirement Income Security Act?

employer matching contributions

Which of the following is a major challenge associated with the implementation of the Fair Labor Standards Act for workers employed on a flexible basis?

ensuring that overtime pay rates are calculated correctly

Which of the following is a consideration regarding higher minimum wages in China?

negative impact on companies because of slower economic growth

Which of the following describes the worth of all goods and services produced in a foreign country valued at prices prevailing in the United States?

purchasing power parity exchange rates

Which of the following is associated with Roth 401(k) plans?

Employees pay taxes on their contribution

The compensation-productivity gap is least substantial in what industry?

Mining

Pertaining to CEO compensation, under classic economic theory, which of the following is true?

The price is obtained through negotiations that are at arm's length

In India, the Minimum Wages Act of 1948 generally applies to which of the following?

occupations that are largely nonunionized or have little bargaining power

Temporary employment agencies are responsible for complying with all employment legislation, except?

workers' compensation

In China, how much was the per capita expenditure on health in 2016?

$860 based on purchasing power parity

How many days will Jamal have to work to complete a "year of service"

125

About how many countries are deemed as hardship locations by the U.S. State Department?

150

The gap between productivity and real hourly compensation was the lowest during which of the following periods.

1947-1973

The gap between productivity and real hourly compensation was 1.1 and 0.9 during which of the following periods?

1973-1979

PPACA has mandated that the "donut hole," which is the gap in Medicare Part D prescription drug coverage, must decrease each year until it reaches no more than which of the following?

25 percent of the prescription drug medication cost

In Germany, an employee can request up to how many year(s) of child-rearing leave?

3

When a telecommuting employee works from a remote extension from the employer's office that includes a clerical staff and a full-time manager, that employee is said to be working at what type of office?

satellite work center

Benjamin is going on his first expatriate assignment to a country considered a hardship location. About how much will he have his base pay increased?

5-35%

Claudia works for a pharmaceutical company in Germany as a blue-collar worker. She used to opt out of the state insurance plan and purchased private insurance. Due to increasing health insurance premiums this year, she decided to get the state insurance plan. Which of the following is true regarding her state health insurance?

50% of health insurance costs are borne by the company, and the other 50% of the costs are borne by the insured.

In 2017, approximately what percentages of private-sector employees and government employees, respectively, had access to an EAP?

51 percent, 78 percent

India's labor force has approximately how many million people?

521

In Germany, how long must an employee work before becoming eligible for paid vacation?

6 months

You broke your neck at work. The company called to inform you that they had to switch your benefits from the short-term disability account to the long-term disability account. Based on this decision, how long have you been off work?

6 months to life

In 2022, how old will Cary have to be to receive full Social Security benefits?

67

How many months in a year must seasonal employees work to qualify for protection under the FLSA overtime and minimum wage provisions?

7

Deloitte University conducted a survey that revealed _____ percent of HR professionals said performance management is important or very important.

78

Deloitte University conducted a survey that revealed ________ percent of respondents state the performance management process drives business results.

8

What percentage of gross earnings do Brazilian employees put towards social insurance?

8% to 11% based on earnings level

What was the cost savings in total labor hours that Adobe System saved once it changed its annual review method?

80,000

Improvements in gender-base pay gaps have been made over recent decades, as of a recent study in 2016 it had improved by what percentage?

81.9%

Stephan will receive a mobility premium for undertaking an assignment in Saudi Arabia. How will he receive it?

A lump-sum payment

Mary works at a pharmaceutical company as a customer service representative. Her employer allows her to choose the set of benefits she will receive on top of pre-established sets of benefits, such as medical insurance and term life insurance. The company gave her credits equal to 6% of her salary with which she decided to purchase dental and vision insurance. This pharmaceutical company uses what kind of benefits plan?

Core plus option

On which group of employees do U.S. companies rely as a pay referent when developing international compensation packages?

Domestic

XYZ Pharmaceuticals recently announced that the clinical trials for a cancer drug failed to cure the illness. This announcement led to a dramatic decrease in the stock value of the company. The company hired a new CEO two years ago when the clinical trials for this drug had already initiated. Which one of the following is true about the compensation of the CEO of XYZ Pharmaceuticals?

Each company handles this situation differently

Which of the following shows an alternative that does NOT lead to a higher total compensation budget?

Elimination of one or more benefits that employees do not fully utilize.

The XYZ Company provides a program for its employees who need help dealing with the effects of domestic violence. The XYZ Company can offer this kind of service through which of the following programs?

Employee Assistance Programs

After working a regular 40-hour workweek in the office, Mary takes her company laptop home and generally spends an hour or two responding to work e-mails. This is an example of which of the following?

Employee Choice

The origins of the common law governing individual employment contracts in Canada were based on the laws of which country?

England

Which type of plans provide an executive with ownership stakes in the company through a variety of mechanisms, including stock option plans and stock purchase plans?

Equity Plans

Which is believed to be one of the results for local municipalities' push for higher local minimum wages?

Lower turnover occurs because of higher wages.

These represent NOT paying a series of payments for the life of the participant and beneficiary.

Lump sum distributions

Outplacement assistance programs are best suited for which condition?

Mergers and acquisitions

Robert has worked full-time as a business analyst for several years, and on an annual basis he received permanent pay increases. Which of the following best describes this type of pay situation?

Merit pay

This type of telecommuting involves executives that travel extensively and maintain control over projects through the use of telephones, faxes, and e-mail.

Nomadic Executive Office

Which set of rules prohibit employers from discriminating in favor of highly compensated employees in contributions or benefits, availability of benefits, rights, or plan features?

Nondiscrimination rules

Which of the following would be considered part of a company's wellness program?

Offering anti-smoking courses

Which of the following could undermine competitive advantage?

Offering employee benefits as an entitlement

The GDP per capita describes which of the following?

a country's standard of living

What was the median annual earnings for all U.S. civilian workers in 2016?

$49,630

In Canada, Maria earns an annual salary of $50,000. The amount of Maria's vacation pay is equal to 4% based upon the 2 weeks she is qualified for. This vacation pay is equal to what amount?

$2,000

Under the Family and Medical Leave Act, how many hours would Pierre have had to work in the previous 12 months in order for him to take time off to care for his wife and new child?

1,250

To be fully insured under the OASDI retirement benefit, an employee would have to work at least how long?

10 years

Safe harbor rules limit the number of leased employees up to which percentage of a company's total workforce?

20%

The gap between productivity and real hourly compensation was the highest during which of the following periods?

2000-2011

The SEC's Summary Compensation Table contains data covering how many years?

3

Using this executive compensation theory, shareholders delegate control to top executives to represent their ownership interest.

Agency

Effective employee benefits communications programs can help reduce which of the following?

An entitlement mentality

In May 2016, the typical CEO earned approximately how much more annually than fast food cooks?

Approximately 567 times more

Which of the following questions should HR professionals consider when selecting employees for expatriate assignments?

Are candidates' families willing to adjust to foreign lifestyles?

Which one of the following racial groups gender wage gap varies by 87.4 percentage of white, non-Hispanic male earnings?

Asian Women

Which of the following are the two main components of current core compensation?

Base pay and bonuses

Which of the following is the difference between the stock price at the time of purchase and the lower stock price at the time an executive receives the stock option?

Capital Gains

The XYZ Co. took back performance-based compensation of $1.2 million from their CEO because of his decision of the buyout of another firm that eventually lowered the overall value of the XYZ Co. Which of the following compensation agreements allowed the board of directors to take back this $1.2 million?

Clawback provisions

Under which type of plan may employees exercise the option of trading extra benefits credits for cash?

Core plus option plans

Which of the following arguments do labor unions use regarding the substantial pay discrepancies between CEOs and non-CEOs?

Discrepancies are socially unjust and promote economic inequality.

Jose invested $2,000 in pre-tax income into this healthcare plan but lost the $780 unspent balance remaining at the end of the year. What type of plan was it?

Flexible spending account

Which of the following contributed to the use of flexible benefits plans?

Greater workforce diversity

Why do health reimbursement accounts (HRAs) appeal to employees with low salaries or hourly wages?

HRAs permit employees to carry unused balances from year to year.

Chris has been working in Vancouver, Canada at an accounting firm for the last 10 years. Which of the following is false regarding his paid time off benefits?

He is entitled to 8 weeks of paid leave to care for a seriously ill family member.

Since U.S. citizen David became an employee of American Eyeful Pictures, Inc., headquartered in Los Angeles, he has worked in Japan, China, and Thailand. The company has probably based his base pay using which method?

Headquarters

Which of the following benefits was previously offered on a discretionary basis, but, is now mandatory?

Health Insurance

When determining Ms. Jenkins' relocation assistance amount, what will you need to consider?

Her length of Assignment

Who is responsible for compensating on-call employees?

Hiring Company

Oliver is employed as a blue-collar worker in the metalworking industry in Baden-Wurttemberg in Germany. His pay is based on minimum wage. Which of the following is probably true regarding his minimum wage?

His wage is established through a collective bargaining process.

U.S. citizen John is an employee of GE, which is headquartered in the United States. His job responsibilities require him to work in Belgium for at least three years. Which method of pay is most appropriate?

Home-Country-Based

Quarters allowance is the U.S. Department of State's nomenclature for which expatriate cost provision?

Housing and Utilities allowance

Which strategy could help contain workers' compensation costs?

Implementing health promotion programs

Starting January 1, 2004, eligible individuals are allowed to establish HSAs under which law?

Medicare Prescription Drug, Improvement and Modernization Act

Which of the following describes CEO compensation that is deemed ineffective?

Pay-for-nonperformance

How is Medicare Part A financed?

Payroll taxes paid by both employers and employees

Which of the following laws permit employers to automatically enroll employees in a defined contribution plan?

Pension Protection Act

The recently appointed CEO of XYZ Inc. uses a luxury summerhouse owned by the company for rest and relaxation with his family as well as a place to invite important clients before a lucrative business deal. XYZ Inc. also provides a membership to an exclusive country club to its CEO. These kinds of benefits offered to CEOs are known as which of the following?

Perquisites

Which of the following is NOT one of the top three largest economies in Asia as of 2017?

Philippines

Ensuring the financial solvency of individuals during periods of temporary unemployment and following work-related injuries helps to do which of the following?

Promote the well-being of the economy

Consumer-driven health care strives to achieve which of the following objectives?

Provide employees with greater choices while also containing costs

In which sector are some unions more likely to support the use of contingent workers?

Public

When there is an absence of pay transparency, it can cause which of the following?

Raise questions about legality and fairness

Which of the following represent additional paid time off for employees working in hardship locations?

Rest and relaxation leave benefits

If a company wanted to hire contingent workers as a way to screen for possible full-time employment, which type of worker would the company likely employ?

Temporary

Which of the following is the most common type of life insurance policy offered by companies?

Term life

Mary is a U.S. expatriate who is assigned to work in Belgium. In order to avoid double income taxation and maintaining residences in the United States and in Belgium, which approach will NOT place her at a financial disadvantage?

The balance sheet approach

Which of the following occurs under tax equalization?

The employer takes the responsibility for paying the income tax on behalf of the expatriates.

What do the indexes of living costs abroad enable expatriates to do?

The indexes are place-to-place cost comparisons at specific times and currency exchange rates.

Successful business endeavors rely on whom?

The right people

If your French-owned company, headquartered in Paris, hired a Canadian manager to work in your plant in Taiwan, she would be considered which type of international employee?

Third Country National

In theory, the CEO hires the consultant to perform an objective analysis of the company's executive pay package and to make whatever recommendations the consultant feels are appropriate; however, in practice, which tends to be the case?

This relationship has the potential to promote a conflict of interest.

Which of the following is a reason why unions tend NOT to support telecommuting arrangements?

difficulty monitoring workers while at home

Which of the following factors contributes to the short-term costs of engaging contingent workers?

downtime while employees are participating in training

Which of the following is considered an enhanced benefit for expatriates?

education reimbursement for expatriates' children

The IRS considers Sylvia to be a highly compensated employee for Beautiful Pictures, Inc., which means that she met which one of the following criteria (assume that the previous year was 2015)?

either an annual salary of more than $170,000; or, in the previous year, a 5% owner or a 1% owner of the employer's business whose annual pay was greater than $150,000

Which of the following describe categories of international employees?

host country national, third country national, expatriates

The U.S. Bureau of Labor Statistics does NOT monitor pay levels for which type of temporary workers?

independent contractors

Which of the following is covered by Medicare Part A?

inpatient hospital care

Unscheduled absenteeism has climbed to its highest levels in the XYZ Company last month. In order to reduce costs, HR professionals in the XYZ Company changed their paid time off policy. This company used to grant each employee 10 vacation days, 5 paid days for sick leave, and 4 days for personal leave. With the new policy, this company combines vacation, sick leave, and personal leave policies into one paid time off policy (i.e., 19 days). The management kept funeral leave as a stand-alone policy. What is the XYZ Company's new policy called?

integrated paid time off

ARAMARK, a company which provides cafeteria service workers to a client company, is an example of the use of which type of employees?

leased employees

Which measure helps compensation professionals understand the standard of health care in the United States and elsewhere?

per capita expenditure on health care

Which of the following do qualified plans provide?

substantial tax breaks to employers and employees

When companies hire new CEOs from other companies, how do they compensate them?

substantially more than individuals who are promoted to CEO from within the company

Most union leaders generally do not support alternative work arrangements based on which of the following two reasons?

threats to job security and unfair treatment

Which of the following is a reason for employers to choose to engage contingent workers?

to reduce employment costs per hour

For which reason does the IRS use the term "key employees"?

top-heavy provisions in employer-sponsored qualified retirement plans

Which of the following factors has contributed to the expansion of global markets?

unification of the European markets

Brazil's workforce has approximately how many million people?

111

Prior to Juanita's first overseas assignment, she was told that she would receive a foreign service premium. Juanita will be on assignment for at least how long?

12 months

To receive OASDI disability benefits, Sung Lee's disability would have to be expected to last at least how long?

12 months

Andre is going to be stationed overseas for about 18 months. Andre's foreign service premium will increase his base pay by about how much?

10-30%

Hui has worked for one month in Guangxi province where the monthly minimum wage is 1000 yuan. What is the minimum allowable wage that Hui can earn in that period?

1000 yuan

What is the maximum amount that companies are permitted to charge COBRA beneficiaries?

102 percent of the cost of health insurance to the beneficiary under the employer's plan

Which of the following are used by the State Department to determine per diem schedules?

Location, Family Size

The Congressional Budget Office study about the minimum wage concluded which of the following?

An increase in minimum wage would lead to job losses among low-skilled workers

What is the status of employee benefits in Brazil?

Any and all benefits habitually granted by the employer cannot be eliminated.

Which of the following would be considered a hardship location (due to dangerous conditions)?

Baghdad, Iraq

Which one of the following racial groups gender wage gap varies by 62.5 percentage of white, non-Hispanic male earnings?

Black women

Under SEC rules, which of the following is true?

Board of director failure to comply can lead to hefty monetary penalties

An employee living in which place would benefit most from telecommuting due to minimizing expenses and commute time?

Boston

The XYZ Co. plans to open a new facility in Canada to be able to reach its Canadian customers more quickly. Which of the following is true regarding labor-related considerations of the new facility?

Both individual and collective employment relationships are controlled at the province level.

Which of the following is rationale to apply a probationary period prior to permitting participation in an employee benefits plan?

Companies view such periods as an opportunity to ensure that they have made sound hiring decisions.

____ is the difference between real hourly compensation and labor productivity.

Compensation-productivity gap

Which of the following is a commonly used employer-sponsored retirement plan design

Defined benefit plan

A 401(k) plan is which of the following types of retirement benefits?

Defined contribution

What type of pension plan commonly includes profit-sharing plans, stock bonus plans, and employee stock ownership plans?

Defined contribution

Which of the following refers to the sale of stock by the stockholder?

Disposition

This type of account does NOT permit employees to carry over any remaining balance from year to year.

Flexible spending account

When company chooses to reveal all information about elements of its compensation system, this is considered_____?

Full transparency

What is gross domestic product (GDP)?

GDP describes the size of a country's economy.

________ refers to the proportion of women's earnings relative to men's earnings.

Gender Pay Gap

Employment costs were highest in which two countries?

Germany and the United States

After the recent merger of ABC and XYZ Airlines, the former CFO of XYZ Airlines, John, lost his employment in the newly merged airline. Which executive compensation agreement is customary in such circumstances?

Golden Parachutes

John has agreed to teach a statistics course on an adjunct basis while the professor who regularly teaches the course is on sabbatical. This example represents which of the following?

Independent Contractor

The compensation-productivity gap is most substantial in what industry?

Information

Which government agency provides the criteria for defining executive status?

Internal Revenue Service

The tax advantage afforded companies from offering particular discretionary benefits has strategic value for which of the following reasons?

It translates into cost savings to companies.

Which of the following is the arrangement where Tanesha and Juanita both work part-time to complete the duties of one full-time position?

Job Sharing

Josh works at a U.S. construction company as a civil engineer. He has been working overseas for the last three years. The hypothetical tax calculated by his company turned out to be less than his actual income tax. In this situation

Josh pays the taxes

Which of the following represent formal criteria for defining executive status?

Key employees and highly compensated employees

____ refers to the part of economic output that goes to workers as compensation in return for their labor.

Labor share of income

Without which type of skills is an expatriate's credibility likely to be undermined?

Language

In the Italian language, "la" refers to the word "the" for feminine nouns, and "il" refers to the word "the" for masculine nouns. Mastering this knowledge is an example of which of the following?

Language Proficiency

Many people are concerned that raising the minimum wage rate will do which of the following?

Lead to higher unemployment

Which type of contingent worker would work for a company on a long-term basis, presumably on an indefinite basis?

Leased Employees

Samuel's full retirement age is 65 years old; and his monthly benefit at that age is $1,000. According to the Social Security Administration retirement program, what will Samuel's monthly benefit be if he decides to take retirement as early as age 63?

Less than $1,000 but greater than $0

Due to a recent merger with another major airline, ABC Airlines decided to lay off some of its employees. ABC Airlines offers training sessions to teach job search and interviewing techniques to those laid off employees. Which kind of service was provided by this airline?

Outplacement assistance

Who is most likely to be involved in a job-sharing arrangement

Part-Time Employees

When company chooses to reveal no information about elements of its compensation system, this is considered _________

Pay Secrecy

In which plan do employees possess the option to receive care from health care providers outside the designated network of physicians, paying more for the choice?

Point-of-service plans

Although Congress has yet to raise the federal minimum wage since 2009

Some states have chosen to raise their minimum wage rates

Which of the following are shares of company stock that are awarded to executives at the end of the mandatory stipulation period?

Restricted stock units

Which type of plan appeared as one of the first discretionary benefits practices?

Retirement Plans

Which organization has as one of its main goals to help prospective investors understand the financial matters of importance to companies?

Securities and Exchange Commission

Which approach to providing health care makes the most sense when a company's financial burden of covering employee medical expenses is less than the cost to subscribe to an insurance company for coverage?

Self-funding

Which of the following is one of the largest trade blocs in South America?

South American Community of Nations

GE changed its performance appraisal method from a force ranking system and now utilizes an effective method that involves which of the following?

Sharing of real-time frequent feedback

Nora has been working at a manufacturing plant in Mexico for the last 18 months. Which of the following regarding her paid time off benefits is false?

She is entitled 6 weeks' leave prior to giving birth and 6 weeks' leave after birth on half salary.

Which of the following is the fundamental purpose of legally required benefits?

Social insurance

As CEO, Duane was granted stock options that do not require him to exercise them to receive income. Which of the following plans is it?

Stock appreciation rights

Which of the following is the used when a company offers stock to its employees?

Stock grant

These rights provide employees with an opportunity to purchase stock shares at a designated price or whenever the stock price increases, usually, within a specified period of time.

Stock option

What is coinsurance?

The insured pays a percentage of covered expenses.

In the end, Yolanda beat Tristen and Michel in a series of competitions among top-level managers to become CEO of National LemGlass. Which compensation theory did the company probably use?

Tournament

Compared to the FICA rate, the SECA tax rate is which of the following amounts?

Twice as much

Canadian retirement plans are most similar to retirement plans in which of the following countries?

U.S.

Which organization has the authority to define a "year of service" for pension protection purposes?

U.S. Department of Labor

Employers usually rely on which source to determine housing and utilities support?

U.S. Department of State's quarters allowances

The first 4 quarters of the last 5 completed calendar quarters in the previous year is the base period for which benefit?

Unemployment Insurance

Managing staffing levels to avoid layoffs due to poor business conditions can help control which type of benefits cost?

Unemployment insurance

Which stakeholder group most strongly opposes the engagement of contingent workers?

Unions

Which of the following countries has the highest per capita GDP?

United States

Which government action contributed to the use of welfare benefits?

Wage freezes

The XYZ Company tries to influence employee food choices by stocking vending machines with healthy food. They also offer programs to teach stress reduction techniques. Which kind of discretionary benefit program does this company sponsor?

Wellness Programs

During the early 20th century, high incidences of industrial accidents and occupational illnesses prompted which of the following benefits?

Workers' compensation

Which of the following type of program can help reduce workers' compensation claims?

Workplace safety

Xue has been working at an electronics manufacturing plant located in Beijing, China for the last 3 years. Her parents live in Shanghai. Which of the following is true regarding her paid time off benefits?

Xue is entitled to "home leave" because her parents live in another city in China and she has met the minimum service requirement.

About how often do companies pay hardship allowances to expatriates?

added to monthly salary amount

For part-time employees to be eligible to be in a company's retirement plan, which two qualifications must be met?

age 21 or older and worked 1000 hours in a year of service

Repatriation refers to which of the following?

an expatriate returning home to work after completing an overseas assignment

The People's Republic of China Labor Law of 1995 resulted in which of the following?

break from "iron rice bowl" employment

Which legally required document reveals detailed information about the compensation of the CEO and named executive officers (NEOs)?

definitive proxy statement (DEF 14(A))

Mexico can be defined as which of the following?

federal republic