FPC Payroll Fundamentals Exam Bank Solution Manual (Rated A+) Already Passed
Worker that has Fed, OASDI, Medicare, State withheld - Answers Employee
Worker that requires the employer to pay ER taxes - Answers Employee
Worker that receives W2 form - Answers Employee
Worker that does not have taxes withheld - Answers Independent Contractor
Worker that has TIN - Answers Independent Contractor
Worker that receives 1099 Form - Answers Independent Contractor
Asks how independent is the employee and how much control can be exervised over the worker. -
Answers Common Law Test
A worker cannot sign a new contract stating that they will be an indepndent contractor. - Answers
Common Law Test
Employer has treated similar workers as independent contractors for any period and has filed tax
returns - Answers Reasonable Basis Test
Longstanding industry standard of treating similar workers as independent contractors - Answers
Reasonable Basis Test
Court decisions for treating workers in similar circumstances as independent contractors - Answers
Reasonable Basis Test
IRS has ruled in a "published ruling" that the workers are indpendent contractors - Answers Reasonable
Basis Test
Temporary Service Provider or Leasing Company - Answers Pays employees and taxes instead of
company the employee is performing services for
Immigration reform and Control Act of 1986 (IRCA) - Answers Requires employer to verify employees'
eligibility for employment in the US.
Penalties for Violating IRCA - Answers $375 for the first offence and $16,000 for the third
Antidiscrimination under IRCA - Answers The law prohibits discrimination in hiring or recruiting workers
on the basis of national origin or citizenship
Verification of eligitability - Answers The burden of verifying that any employee is eligible to work in this
country falls on the employer. All employees hired after November 6, 1989 must be verified.
When must Section 1 of Form I-9 be completed? - Answers The employee's date of hire.
, When must Section 2 of Form 1-9 be completed? - Answers Within three days of hiring the employee.
Form SS-5 - Answers Application for a social security card
Form I-9 - Answers Employment Eligitability Verification
Employee SSN verification is... - Answers recommended but not required.
What information must an employer report for new hires? - Answers Name, Date of Hire, Address, SS,
Employer's Name, Address, and EIN
Fair Labor Standards Act of 1938 (FLSA) - Answers Guarantees employees a minimum wage, requires
employers to pay an overtime premium, limits when minors can work, and provides equal pay
protection.
Who is protected by FLSA? - Answers Nonexempt employees
Minimum weekly salary required for exempt employees - Answers $455
4 categories of exempt employees - Answers Executives, Administrative Employee, Professional, Outside
Sales People
Special FLSA provisions exist for... - Answers Various transportation workers, agricultural workers,
hospital employees, and public sector employees.
Automated clearing house (ACH)- - Answers An entity which serves as the central agency for processing
and transferring funds from one financial institution to another via electronic data transmission. ACHs
operate under rules and standards established by the National Automated Clearing House Association
(NACHA)
Circular E - Answers Employer's Tax Guide (IRS Publication 15). The basic IRS reference. Provides
explanation and illustration of an employer's federal tax withholding, depositing, and reporting
obligations. Circular E provides information relevant to all employers, while Publication 15-A, Employer's
Supplemental Tax Guide , is intended to provide additional information required by larger employers.
Disposable earnings - Answers That portion of earnings remaining after deductions required by law have
been made; used to calculate the maximum amount of an employee's wages subject to garnishment
Electronic funds transfer (EFT) - Answers The electronic movement of funds from one bank account to
another. Direct deposit of employees' paychecks is an example of EFT.
Exempt employees - Answers Generally, employees who are exempt from the minimum wage and
overtime provisions of the Fair Labor Standards Act
FICA - Answers The Federal Insurance Contributions Act which imposes employer and employee taxes to
fund the federal government's old-age, survivors, and disability insurance (OASDI/Social Security) and
health insurance (HI/Medicare) trust funds.
Worker that has Fed, OASDI, Medicare, State withheld - Answers Employee
Worker that requires the employer to pay ER taxes - Answers Employee
Worker that receives W2 form - Answers Employee
Worker that does not have taxes withheld - Answers Independent Contractor
Worker that has TIN - Answers Independent Contractor
Worker that receives 1099 Form - Answers Independent Contractor
Asks how independent is the employee and how much control can be exervised over the worker. -
Answers Common Law Test
A worker cannot sign a new contract stating that they will be an indepndent contractor. - Answers
Common Law Test
Employer has treated similar workers as independent contractors for any period and has filed tax
returns - Answers Reasonable Basis Test
Longstanding industry standard of treating similar workers as independent contractors - Answers
Reasonable Basis Test
Court decisions for treating workers in similar circumstances as independent contractors - Answers
Reasonable Basis Test
IRS has ruled in a "published ruling" that the workers are indpendent contractors - Answers Reasonable
Basis Test
Temporary Service Provider or Leasing Company - Answers Pays employees and taxes instead of
company the employee is performing services for
Immigration reform and Control Act of 1986 (IRCA) - Answers Requires employer to verify employees'
eligibility for employment in the US.
Penalties for Violating IRCA - Answers $375 for the first offence and $16,000 for the third
Antidiscrimination under IRCA - Answers The law prohibits discrimination in hiring or recruiting workers
on the basis of national origin or citizenship
Verification of eligitability - Answers The burden of verifying that any employee is eligible to work in this
country falls on the employer. All employees hired after November 6, 1989 must be verified.
When must Section 1 of Form I-9 be completed? - Answers The employee's date of hire.
, When must Section 2 of Form 1-9 be completed? - Answers Within three days of hiring the employee.
Form SS-5 - Answers Application for a social security card
Form I-9 - Answers Employment Eligitability Verification
Employee SSN verification is... - Answers recommended but not required.
What information must an employer report for new hires? - Answers Name, Date of Hire, Address, SS,
Employer's Name, Address, and EIN
Fair Labor Standards Act of 1938 (FLSA) - Answers Guarantees employees a minimum wage, requires
employers to pay an overtime premium, limits when minors can work, and provides equal pay
protection.
Who is protected by FLSA? - Answers Nonexempt employees
Minimum weekly salary required for exempt employees - Answers $455
4 categories of exempt employees - Answers Executives, Administrative Employee, Professional, Outside
Sales People
Special FLSA provisions exist for... - Answers Various transportation workers, agricultural workers,
hospital employees, and public sector employees.
Automated clearing house (ACH)- - Answers An entity which serves as the central agency for processing
and transferring funds from one financial institution to another via electronic data transmission. ACHs
operate under rules and standards established by the National Automated Clearing House Association
(NACHA)
Circular E - Answers Employer's Tax Guide (IRS Publication 15). The basic IRS reference. Provides
explanation and illustration of an employer's federal tax withholding, depositing, and reporting
obligations. Circular E provides information relevant to all employers, while Publication 15-A, Employer's
Supplemental Tax Guide , is intended to provide additional information required by larger employers.
Disposable earnings - Answers That portion of earnings remaining after deductions required by law have
been made; used to calculate the maximum amount of an employee's wages subject to garnishment
Electronic funds transfer (EFT) - Answers The electronic movement of funds from one bank account to
another. Direct deposit of employees' paychecks is an example of EFT.
Exempt employees - Answers Generally, employees who are exempt from the minimum wage and
overtime provisions of the Fair Labor Standards Act
FICA - Answers The Federal Insurance Contributions Act which imposes employer and employee taxes to
fund the federal government's old-age, survivors, and disability insurance (OASDI/Social Security) and
health insurance (HI/Medicare) trust funds.
