Chapter 1 Payroll
Fundamentals Comprehensive
Questions (Frequently Most
Tested) with Verified Answers
Payroll's Chief Product - the paycheck or pay statement - must be: - Answer: Both accurate and timely
What taxes, if any, must be withheld from an employee's pay? - Answer: Federal income, social security,
and Medicare
What taxes, if any must be withheld from an independent contractor's pay who provides a TIN? -
Answer: No taxes are withheld
Who has responsibility to determine if the worker is an employee or independent contractor? - Answer:
Hiring entity
Prior to beginning work for a company, a chemical engineer signed a contract stating the she agreed to
work as an independent contractor. She performs all her duties in the company's laboratories, where
she has full access to the company's testing equipment. She works under their direction and maintains
regular office hours. What is her status? - Answer: Employee
A retired safety inspector for the company was rehired as a consultant when the company expanded its
plant operations. The retired employee was a natural choice. The tasks he undertook as a consultant
were the same as the one he performed before retirement. Paid monthly, he has agreed to work under
the direction of his old boss until the new plant facilities are fully operational. What is his status? -
Answer: Employee
A receptionist has agreed to work afternoons at the company until they can find a full-time replacement.
What is the receptionist status? - Answer: Employee
Which of the following workers is an independent contractor? - Answer: A lecturer who is paid a
percentage of the money collected at fundraisers when he speaks on behalf of a non profit clinic
, What are exempt employees exempt from? - Answer: Minimum wage and overtime
All of the following type of employees are classified as exempt from the FLSA's minimum wage and
overtime requirements except: - Answer: Computer repairman
A waitress is paid $2.25 per hour, and she receives $255.00 in tips during the week. She works 40 hours
per week. Which of the following is true? - Answer: Her employer is allowed to reduce her cash wage to
no less than 2.13 per hour.
What is the federal minimum wage? - Answer: $7.25
If a state sets the minimum wage greater than the federal minimum wage the state minimum wage
must be paid to workers in that state. - Answer: True
A non exempt employee works in a state with a minimum wage of $7.35 per hour, while living in a state
with a minimum wage of $8.05. What is the minimum rate he must be paid? - Answer: $7.35
Tips can be counted toward the employees minimum wage? - Answer: True
An Employee works 40 hours per week as a fry cook. During the week, she substitutes for one of the
waitresses and reports $15.00 per week in tips. Can her employer pay her 2.13 per hour? - Answer: No
because she must receive $30.00 per month in tips
Employers who provide paid vacation leave must count the hours of paid time off when determining if
the employee must receive an overtime premium when the total hours worked in a week exceed 40. -
Answer: False
A nonexempt employee works the night shift (midnight to 8:00am) and works 45 hours during the week.
Under the FSLA, what must his employer pay him? - Answer: The federal minimum wage
The FLSA requires that time worked on Saturday be paid at overtime rates and time worked on Sunday
be paid at double time rates. - Answer: False
Fundamentals Comprehensive
Questions (Frequently Most
Tested) with Verified Answers
Payroll's Chief Product - the paycheck or pay statement - must be: - Answer: Both accurate and timely
What taxes, if any, must be withheld from an employee's pay? - Answer: Federal income, social security,
and Medicare
What taxes, if any must be withheld from an independent contractor's pay who provides a TIN? -
Answer: No taxes are withheld
Who has responsibility to determine if the worker is an employee or independent contractor? - Answer:
Hiring entity
Prior to beginning work for a company, a chemical engineer signed a contract stating the she agreed to
work as an independent contractor. She performs all her duties in the company's laboratories, where
she has full access to the company's testing equipment. She works under their direction and maintains
regular office hours. What is her status? - Answer: Employee
A retired safety inspector for the company was rehired as a consultant when the company expanded its
plant operations. The retired employee was a natural choice. The tasks he undertook as a consultant
were the same as the one he performed before retirement. Paid monthly, he has agreed to work under
the direction of his old boss until the new plant facilities are fully operational. What is his status? -
Answer: Employee
A receptionist has agreed to work afternoons at the company until they can find a full-time replacement.
What is the receptionist status? - Answer: Employee
Which of the following workers is an independent contractor? - Answer: A lecturer who is paid a
percentage of the money collected at fundraisers when he speaks on behalf of a non profit clinic
, What are exempt employees exempt from? - Answer: Minimum wage and overtime
All of the following type of employees are classified as exempt from the FLSA's minimum wage and
overtime requirements except: - Answer: Computer repairman
A waitress is paid $2.25 per hour, and she receives $255.00 in tips during the week. She works 40 hours
per week. Which of the following is true? - Answer: Her employer is allowed to reduce her cash wage to
no less than 2.13 per hour.
What is the federal minimum wage? - Answer: $7.25
If a state sets the minimum wage greater than the federal minimum wage the state minimum wage
must be paid to workers in that state. - Answer: True
A non exempt employee works in a state with a minimum wage of $7.35 per hour, while living in a state
with a minimum wage of $8.05. What is the minimum rate he must be paid? - Answer: $7.35
Tips can be counted toward the employees minimum wage? - Answer: True
An Employee works 40 hours per week as a fry cook. During the week, she substitutes for one of the
waitresses and reports $15.00 per week in tips. Can her employer pay her 2.13 per hour? - Answer: No
because she must receive $30.00 per month in tips
Employers who provide paid vacation leave must count the hours of paid time off when determining if
the employee must receive an overtime premium when the total hours worked in a week exceed 40. -
Answer: False
A nonexempt employee works the night shift (midnight to 8:00am) and works 45 hours during the week.
Under the FSLA, what must his employer pay him? - Answer: The federal minimum wage
The FLSA requires that time worked on Saturday be paid at overtime rates and time worked on Sunday
be paid at double time rates. - Answer: False
