FPC Exam Questions and Answers -
CORE PAYROLL CONCEPTS
What is an Employee? - Answer-Anyone who performs services for an employer when the employer
controls what work is done and how it is accomplished.
What is a Common-Law Employee? - Answer-Gives employers guidelines to determine whether an
individual is an employee or independent contractor. Done by examining the business and worker, the
level of control each has in how work is done and where.
What is an Independent Contractor? - Answer-An individual who has control how the work is done. The
"payer" merely assigns a task but has little control over how it is done.
What is a Statutory Employee? - Answer-Workers come under common law rules and are independent
contractors by statute for employment tax purposes if they fall within any one of several categories: 1)
Drivers delivering laundry, product, baked goods, beverages (NOT MILK) if the driver is paid on
commission. 2) life insurance sales agent who works full time and whose main business is selling life
insurance. 3) an individual who works at home on employer supplied goods on work that must be
returned to employer.
What is a Statutory Non-Employee? - Answer-these employees fall under two categories: either real
estate agents and direct sellers. These are viewed as self employed if: 1) all payments for their services
are directly related to sales instead of working a certain number of hours. 2) a written contract guides
what services they perform and specifies that for tax purposes they will not be treated as employees.
, What are Temporary Help Services and Personnel? - Answer-Employees hired through an agency on a
temporary status.
What factors should be considered before hiring a temporary employee service? - Answer-1) how are
personnel being tested or evaluated? 2) The firm with the most skilled employees is likely to have an
aggressive recruitment system. 3) Does the service have a solid track record and financial stability? 4) Is
the quality of work by the temporary employee checked? 5) Are temps trained with specific skill?
In determining legal obligations with respect to workplace discrimination, an individual would be
considered an employee of both the staffing agency and the agency's client to which he's assigned
when... - Answer-the staffing agency is a temporary employment agency.
Difference between employee leasing and temporary agency - Answer-If the employees are sent back
to the leasing agency for reassignment, then this is a temporary agency. Leasing agency's are used to
supply the management of certain functions. i.e. human resources, payroll, benefit administration.
What is the 8 and 80 system? - Answer-This generally applies to hospitals and other healthcare
institutions. Allows for these organizations to utilized a fixed work period of 14 days as opposed to the
40 hour work week for computing overtime. Employers will pay time and a half for hours worked over 8
hours in a day or 80 hours in a 14 day period.
Be able to Calculate the 8 and 80 overtime system: - Answer-pg 17 momentrix
Overtime Compensation for working two different jobs - Answer-pg 17 momentrix
How do you calculate employee's regular rate of pay? - Answer-NOT THE TAKE HOME PAY. The formula
to calculate regular rate of pay: pay amount for a workweek/number of hours worked (not including
overtime)
What is the Biweekly rate of pay? - Answer-The biweekly rate of pay of the employee is the regular rate
of pay. For salaried: annual salary should be divided by the number of weeks to be paid and multiplied
CORE PAYROLL CONCEPTS
What is an Employee? - Answer-Anyone who performs services for an employer when the employer
controls what work is done and how it is accomplished.
What is a Common-Law Employee? - Answer-Gives employers guidelines to determine whether an
individual is an employee or independent contractor. Done by examining the business and worker, the
level of control each has in how work is done and where.
What is an Independent Contractor? - Answer-An individual who has control how the work is done. The
"payer" merely assigns a task but has little control over how it is done.
What is a Statutory Employee? - Answer-Workers come under common law rules and are independent
contractors by statute for employment tax purposes if they fall within any one of several categories: 1)
Drivers delivering laundry, product, baked goods, beverages (NOT MILK) if the driver is paid on
commission. 2) life insurance sales agent who works full time and whose main business is selling life
insurance. 3) an individual who works at home on employer supplied goods on work that must be
returned to employer.
What is a Statutory Non-Employee? - Answer-these employees fall under two categories: either real
estate agents and direct sellers. These are viewed as self employed if: 1) all payments for their services
are directly related to sales instead of working a certain number of hours. 2) a written contract guides
what services they perform and specifies that for tax purposes they will not be treated as employees.
, What are Temporary Help Services and Personnel? - Answer-Employees hired through an agency on a
temporary status.
What factors should be considered before hiring a temporary employee service? - Answer-1) how are
personnel being tested or evaluated? 2) The firm with the most skilled employees is likely to have an
aggressive recruitment system. 3) Does the service have a solid track record and financial stability? 4) Is
the quality of work by the temporary employee checked? 5) Are temps trained with specific skill?
In determining legal obligations with respect to workplace discrimination, an individual would be
considered an employee of both the staffing agency and the agency's client to which he's assigned
when... - Answer-the staffing agency is a temporary employment agency.
Difference between employee leasing and temporary agency - Answer-If the employees are sent back
to the leasing agency for reassignment, then this is a temporary agency. Leasing agency's are used to
supply the management of certain functions. i.e. human resources, payroll, benefit administration.
What is the 8 and 80 system? - Answer-This generally applies to hospitals and other healthcare
institutions. Allows for these organizations to utilized a fixed work period of 14 days as opposed to the
40 hour work week for computing overtime. Employers will pay time and a half for hours worked over 8
hours in a day or 80 hours in a 14 day period.
Be able to Calculate the 8 and 80 overtime system: - Answer-pg 17 momentrix
Overtime Compensation for working two different jobs - Answer-pg 17 momentrix
How do you calculate employee's regular rate of pay? - Answer-NOT THE TAKE HOME PAY. The formula
to calculate regular rate of pay: pay amount for a workweek/number of hours worked (not including
overtime)
What is the Biweekly rate of pay? - Answer-The biweekly rate of pay of the employee is the regular rate
of pay. For salaried: annual salary should be divided by the number of weeks to be paid and multiplied
