White Paper: Training the Payroll Staff Part 2: The Wage Hour Test

White Paper: Training the Payroll Staff Part 2: The Wage Hour Test

As I said in my first white paper on this subject, there is more to running a payroll department than just producing X number of payroll checks every X number of weeks and passing them out. Payroll must also comply with every federal, state and local wage and hour or tax law that applies to it specifically. And how does a payroll department, whether it is a party of one or twenty, ensure that it is in compliance with this myriad of laws and regulations? The answer is again quite simple make sure your staff and yourself are thoroughly trained. But then I was inundated with queries as to whether I might have any training quizzes to help you get started. As I just happen to run a payroll training program at Brandman University in So. Cal and I am the subject matter expert for a program run under the Ed-2-Go banner in about 100 universities nationwide, yes I do. So I am making this white paper a three part series and this one will included the wage and hour quizzes. The federal wage and hour quiz, contained at the end of this paper, covers the more common areas of federal wage and hour law. It has 25 questions, each with 4 possible answers. This would be a good basis for the beginner s test on federal wage and hour law. It includes demonstration of the correct calculations for overtime, general knowledge of wage and hour law and a few questions where the knowledge must be applied by determining the major factors in a question. I have highlighted in yellow the correct answers. However, for the questions where math is involved, such as calculating gross pay, I have provided the correct answer but not the math on how to get there. Even the person administering the test needs to make sure they can arrive at the answers without an answer key. Of course you would also need to create one for state wage and hour law. You will find that at the end of the federal test. No answers are provided for this 15 question test as it depends on the state. But again, it is a good starting point for you. And no I haven t forgotten the taxation quizzes. I will have those in the next installment of this white paper series on training employees. 2

Federal Wage and Hour Law Quiz 1. What are requirements for meal and rest period under the FLSA? a. 30 minute uninterrupted meal period and one ten minute break for every four hours of work b. 20 minute uninterrupted meal period and one 15 minute break for every four hours of work c. 30 minute uninterrupted meal period is required but no breaks are required d. There are no requirements under the FLSA 2. What does FLSA stand for? a. Fair Labor Standards Act b. Federal Labor Standards Act c. Fair Labor Standards Agency d. Federal Labor Standards Association 3. What is the current federal minimum wage and when did it become effective? a. $4.75 effective October 1, 1996 b. $7.25 effective July 24, 2009 c. $6.55 effective July 24, 2008 d. $8.00 effective January 1, 2008 4. The FLSA generally restricts employers from making deductions from employees' wages that would reduce the employee's average hourly wage to: a. Less than the statutory minimum b. Below $475 per week c. Less than $155 per week d. There are no restrictions under the FLSA on deductions from pay 5. What is the gross pay for an employee who makes $17 per hour, works 53 hours for the week and receives a $30 production bonus? (Minor cents rounding may occur)? a. $1041.50 b. $1011.50 c. $1045.21 d. $931.00 6. Which of the following category of deductions is permitted, even if an employee's remaining wages fall below the federal minimum? a. Theft of the employer's property by the employee or other individuals b. Damages to the employer's property by the employee or any other individuals c. Court-ordered payments d. Tools used in the employee's work 7. The hourly rate for a computer professional must exceed $ in order to qualify as exempt under the FLSA rules? a. $7.25 b. $6.75 3

c. $27.63 d. $11.25 8. The FLSA does not give a definition for hours worked. However, the U.S. Supreme Court has made several rulings on cases that have held that hours worked include which one of the following? a. Any time spent in physical or mental exertion that is controlled or required by the employer b. Any time recorded on the employee s time card that is approved by the supervisor c. Only time the employee is permitted to record on his or her timecard d. Any time the employee spends traveling to or from his principle place of work 9. To qualify for exemption, employees generally must be paid at not less than per week on a salary basis. a. $455 b. $234 c. $155 d. $475 10. The definition of overtime under the FLSA is: a. 1 times the employee s hourly rate for all hours worked in excess of 40 in a workweek b. 1 ½ times the employee s hourly rate for all hours worked in excess of 40 in a workweek c. 1 ½ times the regular rate of pay for all worked in excess of 40 in a workweek or over 8 hours in a day d. 1 ½ times the regular rate of pay for all hours worked in excess of 40 hours in a workweek 11. The legal workweek is defined under the FLSA as: a. A fixed and regularly recurring period of 168 consecutive hours b. A fixed and regularly recurring work period of 5 days c. Any period of 168 consecutive hours the employee works d. Is not defined by the FLSA but left up to the states to define 12. Calculate the gross pay for the pay period for the following employee: Sylvia is hired at a weekly salary of $600 a week. She is a nonexempt employee. The salary is based on a fixed workweek of 40 hours. She worked 50 hours her first week and 45 hours her second week of a biweekly payroll. a. $1,000.00 b. $1,537.50 c. $1,281.25 d. $1,077.25 13. Which of the following are categories of exempt employees? a. Executive, administrative, professional, and inside sales 4

b. Professional, executive, supervisory, and computer sales c. Administrative, outside sales, professional, and executive d. Computer executive, professional, inside sales, and administrative 14. What is the definition of exempt under the FLSA? a. Exempt from all labor laws b. Exempt from minimum wage and overtime rules c. Not subject to workers compensation d. Exempt from FIT withholding 15. Max is a nonexempt employee who works for the Spike Shoe Company. He must travel 30 miles to work each day to the plant in which he works. During the day, Max also makes deliveries for the company when he is needed to fill in for other drivers. Which of the following applies to Max s travel time? a. All his travel is considered time worked even to and from the factory because it is so far from his home b. He is to be paid for only the compute to and from work c. He must be paid for the travel time during the day doing deliveries but not the travel to and from work d. None of the travel time is considered working time 16. What is the definition of salary basis under the FLSA? a. An employee regularly receives a predetermined amount of compensation each pay period on a weekly, or less frequent, basis. The predetermined amount cannot be reduced because of variations in the quality or quantity of the employee s work. b. An employee regularly receives compensation based on the number of hours worked each pay period on a weekly, or less frequent, basis. c. An employee regularly receives a predetermined amount of compensation each pay period on a weekly, or less frequent, basis. The predetermined amount is reduced because of variations in the quality or quantity of the employee s work. d. An employee regularly receives compensation based on the number of hours worked each pay period on a weekly, or less frequent, basis. The amount cannot be reduced because of variations in the quality or quantity of the employee s work. 17. Calculate the total gross wages that would be due a nonexempt employee covered under the FLSA using the following information: Total hours: 47 (including 8 hours paid for vacation). Rate of Pay: $8.00 per hour. a. $376.00 b. $312.00 c. $404.00 d. $408.00 18. The compensation threshold for highly-compensated employee is: a. $100,000 b. $125,000 c. $133,000 d. $250,000 5

e. $375,000 19. Under which one of the following conditions may the salary of an exempt employee be reduced? a. For a partial-day absence to attend a parent-teacher conference b. For an absence from work for one or more full days for personal reasons other than sickness or disability c. For a full day of pay because the employer was closed due to inclement weather d. For a two day absence due to a minor illness when the employer does not provide wage replacement benefits for such absences 20. What is the minimum wage for newly-hired employees under the age of 20 for the first 90 consecutive calendars days? a. $4.25 b. $6.55 c. $7.25 d. $3.02 21. Mr. Bogart wants to reward one of his employees for handling an irate customer with great skill and saving an account. He has decided to give the employee, Peter, a $100 bonus. Peter is unaware of the bonus and it comes after the event with the irate customer is over. The company does not have a plan or policy to reward employees for dealing with customers. This type of bonus would be? a. a nondiscretionary bonus tied to performance and included in the regular rate of pay calculation b. a discretionary bonus and included in the regular rate of pay calculation c. a discretionary bonus and not included in the regular rate of pay calculation d. a nondiscretionary bonus and not included in the regular rate of pay calculation 22. Which one of the following payroll practices is NOT a violation of the salary basis requirement? a. Taking deductions from exempt employees accrued leave accounts b. Requiring exempt employees to keep track of and record their hours worked c. Requiring exempt employees to work a specified schedule d. All of the above 23. An employee begins work at 8:02, takes lunch from 12:01 to 12:59, and punches out at 5:07. Using the five minute rule, calculate in quarter hour increments, on each punch how many hours should the employee be paid for? a. 8 hours b. 8 hours 15 minutes c. 8 hours 30 minutes d. 7 hours 45 minutes 24. Which of the following payments must be included in the regular rate of pay? a. Discretionary bonus b. non-discretionary bonus c. business expense reimbursement d. vacation pay 6

25. What holidays are required to be given to employees under the FLSA? a. New Year s Day b. Presidents Day c. Memorial Day d. Labor Day e. all of the above f. none of the above, the FLSA does not require employers to provide time off for holidays with or without pay State Wage Hour Law Quiz 1. Which division of the state government has jurisdiction over wage and hour requirements? 2. What is the state s current minimum wage? 3. Describe the meal and/or rest period requirements under state law. 4. Is comp time permitted under state law? 5. List all of the methods of paying an employee that are allowed under state rules. 6. Give the requirements for overtime under state law. 7. What are the state s requirements concerning paying leave benefits such as sick, holiday or vacation pay to current employees? 8. How often must an employee be paid under state regulations? 9. What must be included in an employee s payday statement or paystub? 10. What are the state requirements for paying an employee who has been discharged? 11. What are the state requirements for paying an employee who has resigned? 12. What are the state s rules concerning paying benefits such as vacation pay when an employee terminates? 13. What deductions are allowed to be made from an employee s paycheck under the state rules? 14. Under the state s regulations, how long must payroll records be kept? 15. What are the state s requirements for employers who offer direct deposit of wages? 7