HURM 4640 Exam 1 Questions and Answers Latest Update 2025-2026 Graded A+
Employers can do very little to influence the provisions and payments of legally required benefits (e.g.,
Social Security, Unemployment Compensation, etc.) - Answers False
Employers can control the number of employees hired, control the amount of overtime worked, fight
unemployment, etc.
Benefit plans which require some sharing of expense between employer and employee (contributory
plans) tend to provide broader coverage and gain better employee understanding of value. - Answers
True
Because employers get "wholesale" rates and better tax considerations on pension and insurance plans,
contributory plans will soon be outmoded. - Answers False
The most rapid increases in employee benefits in recent years have been in payments to social
insurance programs and the cost of medical expense plans. - Answers False
Social insurance programs should be replaced with retirement and savings programs
Overtime and premium pay are forms of direct compensation and therefore generally are not classified
as employee benefits (indirect compensation). - Answers True
According to the three tier model presented in class, basic term life insurance is normally considered a
mandatory benefit. - Answers False
Basic term life insurance is a core benefit
In 2008, benefits were 39.2 % of wages and salaries. - Answers False
29.2%
Is Social Security Federally or State Administered? - Answers Federal
Is Medicare Federally or State Administered? - Answers Federal
Is Family and Medical Leave Federally or State Administered? - Answers Federal
Is Worker's Compensation Federally or State Administered? - Answers State
Is Unemployment Insurance Federally or State Administered? - Answers State
Virtually every conceivable employee benefit qualifies as a "mandatory subject for bargaining." -
Answers True
Most benefits enjoy either a tax-exempt or tax-deferred status. - Answers True
Tax-exempt: Will not be taxed
,Tax-deferred: Will be taxed later
An employee's compensation tends to create his/her standard of living: benefits protect it. - Answers
True
Once an employee benefit plan is established, it cannot be withdrawn or reduced. - Answers False
It can be changed, but the employee must be notified
All of the following are typically included in a "narrow" definition of employee benefits EXCEPT:
A. group life insurance.
B. pension plans.
C. educational expense allowances.
D. short-term disability benefits. - Answers C. educational expense allowances
DASRU
Group life insurance - Sickness
Pension Plans - Retirement
Short-term disability benefits - accident
Worker's compensation fits into which of the five categories of employer benefits or costs?
A. Legally required social insurance payments.
B. Payments for private insurance and retirement plans.
C. Payments for time not worked.
D. Extra cash payments to employees.
E. Extra cost payments to employees. - Answers A. Legally required social insurance payments.
Based on U.S. Chamber of Commerce statistics, all of the following statements concerning the
percentage of payroll spent by employers for employee benefits is correct EXCEPT:
, A. Almost two-thirds of this percentage is for medical expense benefits.
B. The percentage for individual businesses varies significantly.
C. Within specific industries, the percentage tends to be higher for firms with 100 or more employees
than for firms with fewer than 100 employees.
D. The percentage tends to be somewhat higher for hourly employees than for salaried employees. -
Answers A. Almost two-thirds of this percentage is for medical expense benefits.
Reasons for the growth of group insurance include which of the following?
I. The influence of organized labor
II. Legislation that mandates benefits
A. I only
B. II only
C. Both I and II
D. Neither I nor II - Answers C. Both I and II
Age discrimination in employment act prohibits discrimination for workers age 40 or older. - Answers
True
ADEA applies only to employers with 15 or more employees. - Answers False
20 or more employees
Group benefits other than medical expense can be reduced for older employees only if cost justified and
only if done on a benefit-by-benefit basis. - Answers False
It can also be done on a benefit package basis
The age discrimination in employment act allows medical expense benefits to be reduced for older
employees only if cost justified. - Answers False
Can not reduce medical expense at all
The ADEA requires that benefits be continued for retired workers. - Answers False
The ADEA says when participation in benefit plans, other than medical expense plans, is voluntary the
company can require larger contributions instead of lowering benefits. - Answers True
Employers can do very little to influence the provisions and payments of legally required benefits (e.g.,
Social Security, Unemployment Compensation, etc.) - Answers False
Employers can control the number of employees hired, control the amount of overtime worked, fight
unemployment, etc.
Benefit plans which require some sharing of expense between employer and employee (contributory
plans) tend to provide broader coverage and gain better employee understanding of value. - Answers
True
Because employers get "wholesale" rates and better tax considerations on pension and insurance plans,
contributory plans will soon be outmoded. - Answers False
The most rapid increases in employee benefits in recent years have been in payments to social
insurance programs and the cost of medical expense plans. - Answers False
Social insurance programs should be replaced with retirement and savings programs
Overtime and premium pay are forms of direct compensation and therefore generally are not classified
as employee benefits (indirect compensation). - Answers True
According to the three tier model presented in class, basic term life insurance is normally considered a
mandatory benefit. - Answers False
Basic term life insurance is a core benefit
In 2008, benefits were 39.2 % of wages and salaries. - Answers False
29.2%
Is Social Security Federally or State Administered? - Answers Federal
Is Medicare Federally or State Administered? - Answers Federal
Is Family and Medical Leave Federally or State Administered? - Answers Federal
Is Worker's Compensation Federally or State Administered? - Answers State
Is Unemployment Insurance Federally or State Administered? - Answers State
Virtually every conceivable employee benefit qualifies as a "mandatory subject for bargaining." -
Answers True
Most benefits enjoy either a tax-exempt or tax-deferred status. - Answers True
Tax-exempt: Will not be taxed
,Tax-deferred: Will be taxed later
An employee's compensation tends to create his/her standard of living: benefits protect it. - Answers
True
Once an employee benefit plan is established, it cannot be withdrawn or reduced. - Answers False
It can be changed, but the employee must be notified
All of the following are typically included in a "narrow" definition of employee benefits EXCEPT:
A. group life insurance.
B. pension plans.
C. educational expense allowances.
D. short-term disability benefits. - Answers C. educational expense allowances
DASRU
Group life insurance - Sickness
Pension Plans - Retirement
Short-term disability benefits - accident
Worker's compensation fits into which of the five categories of employer benefits or costs?
A. Legally required social insurance payments.
B. Payments for private insurance and retirement plans.
C. Payments for time not worked.
D. Extra cash payments to employees.
E. Extra cost payments to employees. - Answers A. Legally required social insurance payments.
Based on U.S. Chamber of Commerce statistics, all of the following statements concerning the
percentage of payroll spent by employers for employee benefits is correct EXCEPT:
, A. Almost two-thirds of this percentage is for medical expense benefits.
B. The percentage for individual businesses varies significantly.
C. Within specific industries, the percentage tends to be higher for firms with 100 or more employees
than for firms with fewer than 100 employees.
D. The percentage tends to be somewhat higher for hourly employees than for salaried employees. -
Answers A. Almost two-thirds of this percentage is for medical expense benefits.
Reasons for the growth of group insurance include which of the following?
I. The influence of organized labor
II. Legislation that mandates benefits
A. I only
B. II only
C. Both I and II
D. Neither I nor II - Answers C. Both I and II
Age discrimination in employment act prohibits discrimination for workers age 40 or older. - Answers
True
ADEA applies only to employers with 15 or more employees. - Answers False
20 or more employees
Group benefits other than medical expense can be reduced for older employees only if cost justified and
only if done on a benefit-by-benefit basis. - Answers False
It can also be done on a benefit package basis
The age discrimination in employment act allows medical expense benefits to be reduced for older
employees only if cost justified. - Answers False
Can not reduce medical expense at all
The ADEA requires that benefits be continued for retired workers. - Answers False
The ADEA says when participation in benefit plans, other than medical expense plans, is voluntary the
company can require larger contributions instead of lowering benefits. - Answers True
