CPP Bootcamp 2025 > Module 1 > Flashcards

Module 1 Flashcards

Payroll Concepts (92 cards)

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1
Q

Child Labor Laws Age 14 & 15

A

-May only work in nonhazardous jobs for 3 days and 18 hours a week when school is in session
-8 hours per day and 40 per week when school not in session

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2
Q

Child Labor Laws Under Age 14

A

-Prohibit employment unless child works for parents
-Or actor, batboy/girl, or ballboy/girl

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3
Q

Child Labor Under 18

A

-Restricts minors under 18 from working in a job that has been declared hazardous by the DOL

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4
Q

Employees Are Covered Under FLSA By

A

Either the Enterprise coverage test or the individual employee coverage test

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5
Q

Enterprise coverage test

A

-Those that have an annual dollar volume of sales or business done of at least $500,000
- hospitals, business is providing medical or nursing care for residents, schools and preschools, and government agencies

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6
Q

Individual employee coverage test

A

-If their work regularly involves them in the commerce between states
- ie, produce of goods that will be sent out of state
- regularly make phone calls to persons located in other states
- handle Interstate transactions, travel to other states
- domestic service workers

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7
Q

Minimum weekly exempt salary and who it does not apply to

A

Under the flsa, white collar exemption rules, exempt employees must be paid a minimum salary of $684 a week
- teachers, lawyers, and attorneys are not required to be paid a minimum salary

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8
Q

Safe Harbor provisions

A

An exemption is lost only if there is an actual practice of improper deductions were made for employees in the same job classification

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9
Q

Uniform reimbursement

A

Employer must pay for purchasing, cleaning, and maintaining if cost would put employee below minimum wage

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10
Q

What does DOL use to classify as ee or ic?

A

Economic realities- is person economically dependent on employer

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11
Q

Excluded from regular rate of pay

A

Gifts
Reimbursement expenses
Paid hours not worked
Stock options
Discretionary bonus
Overtime premiums in excess of flsa requirements

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12
Q

Flsa highly compensated employee

A

Meets at least one or more of the exempt Duty test for an exec, admin, or professional employee
AND
Has an annual compensation of at least $107,432

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13
Q

FMLA leave guarantees

A

12 weeks of unpaid leave in a 12-month period to an eligible employee
AND
Requires group health benefits to be maintained during leave

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14
Q

IRS penalties for intentional misclassification of an employee

A

The employer is liable for 100% of fit, ss, and Medicare (both employee and employer portion) when worker is intentionally misclassified as an independent contractor

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15
Q

IRS penalties for unintentional misclassification of an employee

A

IRS May assess penalties of 1.5% of wages and 20% of the employees share of Social Security and Medicare taxes

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16
Q

When is overnight travel time worked

A

When on scheduled and non-scheduled work days if the travel times coincide with the employees regular working hours

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17
Q

An employee’s form W-4 is invalid when

A

Alterations, additions or deletions have been made to the form.
If it is not signed and dated.
If there is a request for a flat dollar or percentage.
If the employee indicates the form is false

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18
Q

Exempt employees are determined by

A

The employees primary job duties and weekly salary

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19
Q

8/80 rule

A

Applies to hospitals and nursing.
Get overtime over 8 hours in a day or 80 in a work week.
Whichever is more

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20
Q

Salary requirement for outside sales exempt

A

None

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21
Q

Highly compensated employee

A

Total annual comp of $107,432.
Performs non-manual work.
Does not apply to outside sales or computer professionals

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22
Q

Common law test

A

If company has right to control what and how work will be done.
**If control is only what the results are, they are an independent contractor

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23
Q

Under the common law test, the IRS examiners are to group the evidence they gather into what three General types or categories?

A

Behavioral control.
Financial control.
Relationship of the parties

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24
Q

Which factors are not important by IRS in making worker classification determination because of changes in the workplace over the years?

A

Part-time or full-time work.
The location of the work.
Hours of work.

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25
Reasonable basis test is defined by what?
Section 530 of the Revenue Act of 1978 Can be independent contractor based on: Court rulings past IRS audit guidance from an attorney, CPA longstanding practice
26
Back up withholding rate
24%
27
Request for taxpayer identification number and certification is submitted on which form
Form W-9
28
What are the four categories of statutory employees
Agent drivers or commission drivers. Full-time life insurance salesperson. Traveling or City salesperson. Homeworkers. DISH Statutory employees are not subject to fit, but yes to employee taxes ss, med, futa. Full-time sales solely commission based is also exempt from futa
29
What are two categories of statutory non employees?
Qualified real estate agents. Direct sellers. REDS Employers do not have to withhold fit or employee taxes like ss, med, Futa
30
What info must be reported for each new hire?
Name, address, ssn. Date Services first performed for pay. Employer name, address, and FEIN
31
When must the rehire be reported as a new hire?
When they've been separated from company for at least 60 consecutive days
32
Under Federal new hire reporting requirement, how many days does an employer have to report a new hire
20 days after hire date
33
When should employees submit signed w-4?
On or before first day of work
34
What steps of W-4 should be completed?
At least one through five. 1. Name and info and filing status. 2. Two or more jobs. 3. Dependents and credits. 4. Optional other adjustments. 4-C - extra withholding. 5. Signature
35
When should employee file amended W-4 if dependents decrease?
Within 10 days
36
When is an amended W-4 implemented?
When an employee submits an amended Form W-4, it must be implemented with the first payroll no later than 30 days after the form is submitted.
37
When must change in withholding apply after employees submits amended w-4?
No later than first payroll. And in honor after the 30th day after receiving form
38
If claimed exempt on W-4 when must form be resubmitted?
February 15th of the next year
39
Lock-In Letter
IRS notice requiring FIT withholding for EE Begin with holding based on date on letter
40
How can an employee challenge a lock-in letter and how long do they have?
Provide a new W-4 and written statement directly to the irs. At least 45 days, generally 60
41
When should employer give lock-in notice to employee?
Within 10 business days of receipt if still employed
42
Effective date of lock-in letter
At least 45 days after the day of the letter
43
Where can instructions for withholdings be found?
Publication 15-t federal income tax withholding methods
44
Default rate of withholding on the non-periodic payment
10%
45
What is the I-9 form used for?
To verify an individual has the legal right to work in the us. I-9 should be retained for 3 years after date of hire or one year after term date
46
What three methods can be used to verify Social Security numbers?
Paper list. Phone. Magnetic tape
47
What is the name of the program employers can use to verify employees authorization status of new hires with US citizenship and Immigration Services
E-Verify Program If an employer uses the program, new hires must enter SSN in Section 1 of 1 through 9 If an employee is rehired after 60 consecutive days must be reported as new hire
48
What is Form I-9?
Form I-9, Employment Eligibility Verification, verifies an individual’s identity and right to work in the United States.
49
FLSA Enterprise Coverage
All the employees of a business are covered and proted by the FLSA if 1. at least two employee in interstate commerce, and 2. annual gross slaes at least $500,000
50
Which may be submitted to IRS to receive written determination of a worker's status as EE or IC? A) Form W-5 B) Form SS-5 C) Form SS-8 D) Form W-9
C) Form SS-8
51
Which of the following is not regulated by the FLSA? A) Child labor B) Overtime pay C) Minimum wage rates D) 8 hour work day
D) 8 hour work day
52
There are 3 parts of the ABC test, which is not one of them? A) Business - unusual and/or away B) Risk of loss C) Customarily Independent Contractor D) Absence of control
B) Risk of loss
53
Which is not a White Collar Exemption? A) Administrative B) Executive C) Management D) Professional Employees
C) Management CAPES Computer Professionals Administrative Professionals Executives Sales Persons
54
Who enforces the equal pay provisions? A) Individual States B) IRS C) EEOC D) DOL
C) EEOC
55
Which is not covered under FLSA? A) How often EEs must be paid B) ER recordkeeping requirements C) Sets minimum wage and OT rates D) Mandates equal pay for equal work
A) How often EEs must be paid
56
Under reasonable Basis, which does not support an ERs treatment of a worker as IC? A) Past IRS employment tax audit B) Published IRS rulings C) Place of work D) Private letter rulings
C) Place of work
57
Which form might be submitted to SSA to receive determination letter or worker's status? A) SS-4 B) SS-5 C) SS-8 D) None of the above
D) None of the above SS-5 is submitted to the IRS, not the SSA
58
FMLA leave guarantees
12 weeks of unpaid leave in a 12 month period to an eligible employee and requires group health benefits to be maintained during the leave.
59
Traits of an employee include
Has taxes withheld from wages; reimbursed for expenses; complies with employer’s instructions about when, where, and how to work; work is done personally; performs services under company’s name.
60
Traits of an independent contractor
Sets own hours; determines own sequence of work; works for multiple organizations; self-employed; works by the job; employs assistants.
61
What does the FLSA cover?
MOE CPR Minimum wage Overtime Equal Pay for Equal Work Child Labor Restrictions Public Service Contracts Recordkeeping
62
What is SSNVS?
Social Security Number Verification Service is SSA’s system that allows employers to verify if an employee’s name and SSN match SSA’s records
63
What is a nondiscretionary bonus?
A nondiscretionary bonus is a contractual or agreed￾upon bonus or incentive. Nondiscretionary bonuses paid to nonexempt employees are included in the regular rate of pay.
64
What is backup withholding?
24% FITW on reportable non-payroll payments when a TIN is not provided or the organization is notified by the IRS to withhold. It is reported annual on Form 945
65
What is engaged to be waiting?
Engaged to be waiting is compensable time because the employer requires the employee to wait to begin work.
66
What is the federal wage & hour law also known as?
The Fair Labor Standards Act (FLSA)
67
What is the regular rate of pay?
The regular rate of pay is used to calculate a nonexempt employee’s overtime premium
68
What is waiting to be engaged?
Waiting to be engaged is not compensable time because the employee is free to pursue personal business
69
What varies in a fluctuating workweek?
When a nonexempt employee is paid using the FLSA fluctuating workweek, the employee’s hours vary while the employee’s salary remains constant. An overtime premium must be paid for time worked over 40 hours in a workweek.
70
When are meal periods time worked?
A meal period that is not at least 30 minutes of uninterrupted time is time worked under the FLSA
71
Who is an exempt employee?
Under the FLSA white collar exemptions, employees perform job duties meeting certain requirements and are paid a weekly salary of at least $684 per week. Exempt employees are exempt from minimum hourly wage and overtime.
72
Who uses economic realities factors?
The DOL uses the economic realities factors to determine an employer-employee relationship where the worker is economically dependent on the employer
73
The reasonable basis test
Allows employers to treat individuals as independent contractors, if there is a reasonable basis for doing so
74
Form SS-8 may be filed with the IRS only by the employer? A. True B. False
B. False Employer and worker can file
75
An employee can request a flat dollar amount or flat percentage to be withheld by amending Form W-4. A. True B. False
B. False Under IRS rules, employees make their W-4 invalid by requesting a flat dollar amount or flat percentage to be withheld.
76
An employer should remind employees to revise their Forms W-4 if their anticipated filing status or dependents have changed: A. each pay period. B. each quarter. C. by December 1. D. by January 1.
C. by December 1. IRS regulations say an employer should remind employees to revise their Forms W-4, if their anticipated filing status or dependents have changed, by December 1 resulting in a change to their tax liability.
77
An employee is required to file a new Form W-4 in all the following situations EXCEPT: A. with the adoption of a child. B. when a child is no longer claimed as a dependent. C. when a divorce is finalized. D. with the death of a dependent in the previous year.
A. with the adoption of a child. Employees must complete a new W-4 when their change in status requires MORE income tax to be withheld.
78
Eligibility to work in the U.S. is verified by the: A. employee. B. Department of Labor C. U.S. Citizenship and Immigration Services. D. employer.
D. employer. Eligibility to work in the U.S. is verified by the employer through the completion of Form I-9 as required by the Immigration Reform and Control Act of 1986.
79
An employee provides a new Form W-4 on August 15. The employer must retain the prior Form W-4 until: A. January 1 of the following year. B. April 15 of the following year. C. four years after the new form was filed. D. four years after the last tax return was filed using the information on the Form W-4.
D. four years after the last tax return was filed using the information on the Form W-4. Employers must retain the prior Form W-4 for at least four years from the date of the last tax return (Form 1040) is filed using the information from the Form W-4.
80
Employees can file an exempt Form W-4 when they: A. expect to owe no taxes this year. B. owed taxes last year and expect to owe taxes this year. C. had no tax liability last year and expect to have no tax liability this year. C. do not want taxes withheld this year.
C. had no tax liability last year and expect to have no tax liability this year.
81
Under the FLSA, an employee's work time ends when the employee: A. arrives home. B. ceases performing principal activities. C. punches out on the time clock. D. leaves the job site.
B. ceases performing principal activities.
82
Under the FLSA, an employee's workday is defined as the: A. employee's scheduled shift. B. time recorded on the employee's time sheet. C. time the employee is performing principal activities. D. entire time the employee spends on the job site.
C. time the employee is performing principal activities.
83
Which of the following regulations is governed by both the state and the federal governments? A. Frequency of pay B. Final pay to a terminated employee C. Exempt status D. Breaks
C. Exempt status Exempt/nonexempt status is governed by both the state and the federal governments. State Wage and Hour laws may impose requirements beyond those found in the FLSA.
84
A Taxpayer Identification Number and name reported on Form 1099-NEC can be checked by using the: A. SSA's Social Security Number Verification Service. B. IRS's Social Security Number Verification System. C. SSA's TIN Matching System. D. IRS's TIN Matching System.
D. IRS's TIN Matching System. A Taxpayer Identification Number (TIN) and name reported on Form 1099-NEC can be checked by using the IRS's TIN Matching System.
85
Statutory employees are workers who: A. receive a Form 1099-MISC for their wages earned. B. are employees under the common law test. C. are not subject to federal income tax withholding. D. are employees under the reasonable basis test.
C. are not subject to federal income tax withholding. Statutory employees are workers who are not subject to federal income tax withholding but are subject to social security and Medicare taxes while having their wages reported on Form W-2.
86
What information, if any, is included on a statutory employee's Form W-2? A. Only the Statutory Employee check box in Box 13 is checked B. Nothing is reported on Form W-2 C. Wages in Boxes 1, 3, and 5, with the Statutory Employee check box in 13 checked D. Wages in Boxes 3 and 5, with the Statutory Employee check box in 13 checked
C. Wages in Boxes 1, 3, and 5, with the Statutory Employee check box in 13 checked A statutory employee's wages is included on Form W-2 in Boxes 1, 3, and 5, with the Statutory Employee check box in 13 checked. A statutory employee's wages (Box 1) are not subject to federal income tax withholding but are subject to social security (Box 3) and Medicare (Box 5) taxes.
87
Participation in the E-Verify program is voluntary for all employers? A. True B. False
B. False Employer participation in the E-Verify program is generally voluntary. However, employers with federal contracts or subcontracts that contain an E-Verify clause are required to enroll in E-Verify as a condition of federal contracting. Employers may also be required to participate in E-Verify if their states have legislation mandating the use of E-Verify. In some cases legal rulings may compel employer participation in E-Verify.
88
Section 530 of the Revenue Act can supersede the definition of an employee as defined under the common law test? A. True B. False
A. True Even though a worker meets the definition of an employee under the common law test, an employer may treat a worker as an independent contractor exempt from federal payroll tax laws if it has a reasonable basis for doing so.
89
To request federal income tax withholding from third-party sick pay, an employee must submit Form: A. W-4P. B. W-4S. C. W-4V. D. W-9.
B. W-4S. An employee must submit Form W-4S, Request for Federal Income Tax Withholding From Sick Pay, to have a third-party insurance company withhold FIT.
90
During the employment verification process, an employer can request specific documents. A. True B. False
B. False When completing Form I-9 during the employment verification process, an employer CANNOT request specific documents. The newly hired employee can present any of a number of documents listed on Form I-9.
91
After an employer receives an IRS penalty notice for an employee's failure to provide a correct name and SSN, when must the employer request the employee to complete Form W-4? A. Each quarter thereafter B. Each pay period thereafter C. By December 31st of that year D. Each month thereafter
C. By December 31st of that year
92
The E-Verify program checks which databases to verify employment authorization of newly hired employees? A. IRS and ICE B. SSA and IRS C. SSA and DHS D. IRS and DHS
C. SSA and DHS
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