Payroll Accounting Chapter 2

Pat Hinkle earns $2,000.00 bi-weekly. Her overtime rate of pay per hour is

$37.50 Correct. $2,000.00/2 = $1,000.00 per week, $1,000.00/40 hours = $25.00 per hour, $25.00 * 1.5 = $37.50 Pg 2-21

Overtime Premium

method of calculating overtime pay by multiplying the total hours worked (including overtime hours) by the regular rate of pay and then multiplying the overtime hours by one-half the regular hourly rate.

Tipped Employee

one engaged in an occupation in which tips of more than $30 a month are customarily and regularly received.

If an unlawful pay differential between men and women exists, the employer must

raise the lower rate to equal the higher rated.

Wages

remuneration or compensation of paid employees.

Salary

remuneration paid on a monthly, biweekly, semimonthly, or yearly basis.

Wage

remuneration paid on an hourly, weekly, or piece-work basis.

Domestic Service

services of a household nature performed in or about a private home of the person who employs the domestic.

Commission

stated percentage of revenue paid an employee who transacts a piece of business or performs a service.

In order to get caught up, a non-exempt employee takes work home. The employee _______________ for this extra time.

must be paid.

Who, of the following, has a full FLSA overtime exemption?

Radio station announcers

Employee

any individual performing services for an employer in the legal relationship of employer and employee.

Individual Employee Coverage

applied to determine if the FLSA covers an employee. The test is that the employee either engages in interstate commerce or produces goods for such commerce.

A ____________ time clock identifies an employee's unique fingerprint, handprint, voice, iris, or whole face.

biometric.

The Fair Labor Standards Act (FLSA)

commonly known as the Federal Wage and Hour Law, contains provisions and standards concerning minimum wages, equal pay for equal work regardless of sex, overtime pay, recordkeeping, and child labor.

Piece-Rate System

compensation plan under which workers are paid according to their output (units or pieces produced).

Profit Sharing Plans

compensation plans in which employer shares with employees a portion of the profits of the business.

To calculate the overtime hourly rate for employees who are paid biweekly, ________________ by 2 to arrive at the weekly salary, then _____________________ the weekly salary by the regular number of hours worked to obtain the hourly rate. ________________ this rate by one and one-half to obtain the overtime rate.

divide, divide, multiply

The regular rate of pay for a salaried nonexempt employee is found by _____________ the number of hours expected to be worked each week into the weekly salary.

dividing

For a salaried employee working a fluctuating schedule who is paid on a fixed salary, overtime pay is found by __________________ the normal salary by the total hours worked, and then __________________ that number in half to get the extra half-rate.

dividing, dividing

Overtime paid in advance, when an employee works less than a normal 40 hour workweek

does not violate FLSA pay requirements.

Bi-Weekly

every two weeks. 80 hours

Semi-Monthly

twice a month. 2080/24=86.67

Exempt Employees

workers exempt from some, or all, of the FLSA requirements such as minimum wages, equal pay, and overtime pay.

"Engaged to wait" is considered as _________ and "Waiting to be engaged" is considered as _______.

working time, non working time.

Joe Wilkes earns $4,000 per month. He worked 22 hours of overtime this month. Joe's gross salary for the month is

$4,761.64 Correct. $4,000 * 12 months = $48,000 annually, $48,000 / 52 weeks = $923.08 per week, $923.08 / 40 hours = $23.08 per hour, $23.08 * 1.5 = $34.62 overtime rate, $34.62 * 22 hrs = $761.64 OT pay, $761.64 + $4,000= $4,761.64 Pg 2-23

Cindy Shrankel worked 35.5 hours this week at $18.25 per hour. Her gross salary is

$647.88 Correct. 35.5 * $18.25 = $647.88 Pg 2-21

Dolores Woods earns $580.00 for a 40 hour workweek. Woods worked 48 hours this week. Her gross pay for the week is

$754.00 Correct. $580.00/40 hrs = $14.50 per hour, $14.50 * 1.5 = $21.75 overtime rate, $21.75 * 8 = $174.00, $580.00+ $174.00 =$754.00 Pg 2-21

Stan Warren worked 46.5 hours this week Warren earns $16.75 per hour. His gross pay for the week is

$833.35 Correct. 40 * $16.75 = $670.00 regular pay, OT, OT rate $16.75*1.5=$25.13, $25.13*6.5 hrs=$163.35 OT pay, $670.00 + $163.35 = $833.35 Pg 2-21

Bob Brooks works a 37.5 hour week and his salary is $806.25. He and his employer agreed his salary covers all hours worked up to 40. This week, Brooks worked 43 hours. Brooks' gross pay for the week is:

$903.00 Correct. $806.25/37.5 = $21.50/hr, $21.50* 1.5 = $32.25 OT rate, $32.25*3=$96.75 OT pay, $96.75 + $806.25 = $903.00 Pg 2-24

In Miami, Florida the living wage rate for city employees or those who work for companies with city contracts that exceed $100,000, if employer provides health insurance is $12.46 per hour. The wage rate if employer does not provide health insurance is $14.27 per hour.

....

Continental System

method of recording time on time cards in which the day is divided into one 24-hour period, with time running from 12 midnight to 12 midnight.

If the overtime premium approach is used, overtime premium pay is calculated by _______________ the overtime hours by an overtime premium rate of one-half of the regular hourly rate.

multiplying

State employees working in the area of public safety may accumulate compensatory time off up to ________ hours.

480

Due to a special order, Jared worked 56 hours this week. Jared's regular rate of pay is $17.00 per hour. Jared's gross pay for the week is

$1,088.00 Correct. 40 * $17.00 = $680.00 regular pay, $17.00 * 1.5 = $25.50 OT hourly rate, $25.50 * 16=$408.00 OT pay, $680.00+$408.00= $1,088.00 Pg 2-21 Objective Association

Lowell Thomas produced 4,000 units during his 40 hour workweek. Thomas's regular rate of pay is $0.12 per unit & he is paid a bonus of four cents for each unit produced over 3,000. Thomas's overtime rate is

$19.50 per hour $0.12 * 4,000 = $480 regular pay, $0.04 * 1,000 = $40 bonus pay, $480 + $40 = $520, $520/40 = $13.00/hr., $13.00 * 1.5=$19.50/hr. Pg 2-26

Per the FLSA, a tipped employee is one who receives ________ or more per month in tips.

$30.00

In determining the working time of employees, the principal activities of employees include:

All of the above.

In order not to interfere with the schooling and well-being of minors between the ages of 14 and 16, employers of these minors must satisfy which of these conditions?

All of the above.

The IRS groups the items of evidence into which of the following categories in determining the existence of an employer/employee relationship?

All of the above.

To be classified as a highly compensated employee, he or she must:

All of the above.

Which of the following establishments may employ full-time students at 85 percent of the minimum wage?

All of the above.

Time spent by employees in attending lectures or training sessions does not count as working time under which condition?

All of the above. The meeting or lecture is not directly related to the employee's work The meeting or lecture takes place outside regular working hours The employee does not produce any goods or perform any other productive work during the meeting or lecture Attendance by the employee is voluntar

Nondiscretionary bonuses include __________________________. .

Amounts set up as inducements to achieve goals.

A state employee may be paid for compensatory time off in which of the following cases?

Both "At termination of employment" and "Upon reaching the "bank" maximum of 480 or 240 hours"

The two bases of coverage provided by the FLSA are:

Enterprise coverage and Individual employee coverage

The types of exempt white-collar employees are:

Executives, administrators, professionals, highly compensated employees, computer professionals, creative professionals, and outside salespersons.

Non-Discretionary Bonus

a bonus normally based on hours worked, units produced, production efficiency, or work quality.

Discretionary Bonus

a bonus not agreed on, announced, or promised before payment.

Preliminary and postliminary activities would be counted as time worked if required by ____________________.

a local custom or an employee contract.

The following employees are exempt from which of the requirements of the FLSA: a. Amusement park employees are exempt from b. Taxicab drivers are exempt from c. Casual baby sitters are exempt from d. Elementary school teachers are exempt from e. Outside salespersons are exempt from

a) minimum wage, equal pay, and overtime provisions b) only the overtime provisions c) minimum wage, equal pay, and overtime provisions d) minimum wage, equal pay, and overtime provisions e) minimum wage, equal pay, and overtime provisions

The Wage and Hour Division of the U.S. Department of Labor (DOL)

administers the FLSA.

Commissions are considered to be payment for hours worked _______________________ included in determining the regular hourly rate.

and must be

Enterprise Coverage

applied to determine if employees of an enterprise are covered under the provisions of the FLSA. The test criteria are at least two employees engaged in interstate commerce and an annual gross sales volume of at least $500,000.

The Wage and Hour Division allows employers to round off employees' work time to the nearest __________ minutes.

five, six or fifteen.

Work-Week

fixed and regularly recurring period of 168 hours? 7 consecutive 24-hour periods.

Time Card

form on which employee's time worked is recorded manually by the worker or automatically by a time clock.

Time Sheet

form that indicates an employee's time of arrival and time of departure.

Tip

gift or gratuity given by a customer in recognition of service performed for him or her.

The FLSA

requires overtime pay for all hours worked in excess of 40 in a workweek.

When an employee is in a profession that is customarily tipped

the employer may take a $5.12 credit towards the minimum wage.

Common-Law Relationship

the state existing when the employer has the right to control both what work will be done and how it will be done.

Principal Activities

those tasks employees must perform for the employer.

If an employee must travel a substantial distance from their usual work location to perform work, the travel to and from that site counts as

time worked.

Gross Earnings

total regular earnings and total overtime earnings, also known as gross pay.