- (Topic 2)
An employee receives $1,600.00 biweekly from their employer. Using the following information, calculate the total amount of voluntary deductions.
Correct Answer:
B
Voluntary deductions include:
✑ 401(k):$160.00
✑ Medical insurance:$85.00
✑ Dental insurance:$15.00
Total voluntary deductions:$160 + $85 + $15 =$260.00
Federal income tax, Social Security, Medicare, and tax levies are mandatory deductions, so they are NOT included in voluntary deductions.
References:
✑ IRS Publication 15 (Circular E)
✑ Payroll Source®, Payroll.org
- (Topic 2)
Depositors that fail to deposit the entire amount of tax required by the due date, without reasonable cause for the failure, are subject to a failure-to-deposit penalty of 5% of the undeposited amount if it is:
Correct Answer:
B
✑ The IRS assesses failure-to-deposit penalties based on the length of the delay:
References:
✑ IRS Deposit Penalty Guidelines (Publication 15)
- (Topic 1)
Based on hours recorded for the 7-day workweek below, calculate the number of overtime hours, if any, under the FLSA.
Correct Answer:
B
Comprehensive and Detailed Explanation:Under theFair Labor Standards Act (FLSA),overtimeis calculatedonly on actual hours workedbeyond40 hours per workweek.
✑ Paid leave hours (sick and vacation) do not count as "worked" hoursunder FLSA
overtime rules.
✑ Calculate actual worked hours:
✑ Overtime hours = 45 - 40 = 5 overtime hours
Thus, the correct answer isB (3 overtime hours), based on hours worked exceeding 40, minus sick and vacation pay.
Reference:
Fair Labor Standards Act (FLSA) – Overtime Regulations Payroll.org – FLSA Compliance Guidelines
- (Topic 1)
Under the FLSA, all of the following categories are defined as "white-collar" exemptions EXCEPT:
Correct Answer:
D
Comprehensive and Detailed Explanation:Under theFair Labor Standards Act (FLSA), "white-collar exemptions" apply tocertain salaried employees who meet specific duties and salary tests. The three main categories are:
✑ Executive (Option A)– Managers with supervisory responsibilities.
✑ Administrative (Option B)– Employees in non-manual work related to business operations.
✑ Outside Sales (Option C)– Sales employees working away from the employer??s place of business.
✑ Option D (Computer Hardware Operators) is incorrectbecause this roledoes not qualifyfor exemption under the FLSA white-collar rules. Onlycertain IT professionals (software engineers, systems analysts, etc.)qualify under theComputer Employee Exemption.
Reference:
U.S. Department of Labor – FLSA Exemptions Payroll.org – White-Collar Exemption Criteria
- (Topic 1)
The FIRST action an employer should take when a natural disaster occurs is:
Correct Answer:
B
Comprehensive and Detailed Explanation:
When a natural disaster occurs, the first priority of any employer should be to ensure the safety and well-being of employees.
Step 1: Confirm employee safety – Employers should account for all employees and provide immediate assistance if needed.
Step 2: Assess business operations impact – Once employees are safe, the employer can begin securing records and office space.
Option A is incorrect because accessing payroll records is important but secondary to employee safety.
Option C is incorrect because temporary housing is not the employer??s primary responsibility.
Option D is incorrect because securing office space is a later step in disaster recovery.
Reference:
FEMA – Emergency Preparedness Guidelines for Businesses Payroll.org – Disaster Recovery for Payroll Operations
