MODULE 7 - Record Keeping & Payroll Practices

Question 1

What pay and wage regulations are governed by state regulations rather than federal FSLA?

Answer 1

-frequency employers pay employees
-when final wage payments must be made
-lag-time between end of the pay period and pay date

(Memory Tool: think about how California requires same-day final payments. Helps you remember it MUST be regulated by states)

Question 2

What law regulates how long hours worked records must be kept?

Answer 2

Fair Labor Standards Act (FLSA)

Question 3

Under the FLSA, how long are employers required to keep records of hours worked?

Answer 3

3 years after the last entry

Question 4

What is batch processing?

Answer 4

Coding and collecting of items processed into similar groups to allow those items to be input into a payroll system as a group.

Question 5

What does RDFI stand for?

Answer 5

Receiving Depository Financial Institution

Question 6

When a payment is made by direct deposit, what is the RDFI?

Answer 6

The employee’s bank

Question 7

What is escheat?

Answer 7

The process of transferring abandoned wages to the appropriate state agency.

Question 8

In a business continuity plan, what is Step 1?

Answer 8

Obtain top management’s commitment to developing and implementing the plan when needed.

Question 9

What is a master file?

Answer 9

The collection of data describing the employees of a company.

Question 10

True or False: Government agencies do not required a master file to be kept in any specific format.

Answer 10

True

Question 11

What is the service level agreements record?

Answer 11

The understanding about services, priorities, responsibilities, guarantees, and warranties between the parties.

Question 12

What is a computer interface?

Answer 12

The point where two distinct data-processing elements meet and pass data between systems.

Question 13

The total of all Forms W-2 Box 1 must equal Line _____ from all Forms _____ filed during the year.

Answer 13

Line 2, Forms 941

Question 14

The total of all Forms W-2 Box 2 must equal Line _____ from all Forms _____ filed during the year.

Answer 14

Line 3, Forms 941

Question 15

What does ODFI stand for?

Answer 15

Originating Depository Financial Institution

Question 16

When a payment is made by direct deposit, what is the ODFI?

Answer 16

The employer’s bank.

Question 17

What law regulates how long time cards must be kept?

Answer 17

Fair Labor Standards Act (FLSA)

Question 18

Under the FLSA, how long are employers required to keep time cards?

Answer 18

2 years after the last entry

Question 19

What is the difference between time cards and hours worked record?

Answer 19

Time cards are the original source document (punch cards, digital clock/in out logs, etc.). Worked hours record is the official payroll records used to calculate employee wages.

Question 20

How long must Form I-9 be retained after an employee is terminated?

Answer 20

For the later of 3 years after the date of hire or one year after the date of termination.

Question 21

How long must copies of tax returns be kept?

Answer 21

4 years after the return’s due date or payment date, whichever is later.

Question 22

What does payroll documentation include?

Answer 22

-Confidentiality statement
-Table of contents
-Overview of the payroll system
-Step-by-step procedures

Question 23

What governs privacy rights?

Answer 23

-Federal law
-State law
-Company policy

Question 24

What is the final stage after implementing a new payroll system?

Answer 24

Evaluating

Question 25

Fraudulently under-depositing payroll taxes may incur an additional penalty of ______%.

Answer 25

75

Question 26

Records substantiating additions to and deductions from wages need to be retained for how many years?

Answer 26

2

Question 27

The IRS requires the allocation of tips data to be retained for how many years?

Answer 27

4

Question 28

The DOL requires supplemental records including time cards and work time schedules to be retained for how many years?

Answer 28

2

Question 29

The DOL requires the record of each employee's hours worked each week be retained for how many years?

Answer 29

3

Question 30

Under IRS regulations, how many years must a returned Form W-2 be retained?

Answer 30

4

Question 31

How long must an employer maintain records it is required to keep under the Family and Medical Leave Act?

Answer 31

3 years

Question 32

Negligent (not fraudulent) underreporting of payroll taxes may incur an additional penalty of ______%.

Answer 32

20%

Question 33

The IRS and SSA require wages subject to federal income tax, federal income tax, social security and Medicare wages, and social security and Medicare taxes to be in balance between which two forms?

Answer 33

Form 941 and Form W-3 (or all Forms W-2)

Question 34

If a company fails to file an information return, like Forms W-2, in a timely and accurate manner or format, what penalties can they face?

Answer 34

$60/return if corrected by Mar 2 $130/return if corrected Mar 3 to Aug 1 $340/return if corrected after Aug 1

Question 35

The IRC requires employees' Forms W-4 be kept by the employer for at least how long?

Answer 35

4 years after the due date of the tax return for which the records relate.