FPC Exam Study Questions with Verified Answers Graded A 2024
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Course
FPC .
Institution
FPC .
payroll -answer- The process used to pay employees accurately and on time
Employee Federal Withholding Taxes -answer- Federal income tax, social security tax, medicare
Independent Contractor -answer- any person who agrees to perform a service for a fee and who is not subject to the control of...
FPC Exam Study Questions with Verified
Answers Graded A 2024
payroll -answer- The process used to pay employees accurately and on time
Employee Federal Withholding Taxes -answer- Federal income tax, social security tax,
medicare
Independent Contractor -answer- any person who agrees to perform a service for a fee
and who is not subject to the control of those for whom the service is performed
Independent Contractors -answer- hired on temporary contracts and are not part of the
organization's permanent workforce
Common Law Test -answer- A test to determine employment status that focuses on the
hiring principal's right to control the manner and means by which the worker pursues the
work result to be accomplished
Common Law Test - Employee -answer- - Required to comply with employer
instructions about when, where, and how to work
- Works exclusively for the employer
- Hired by the employer
- Subject to dismissal and can quit without liability
- Has a continuing relationship with the employer
- Assigned work must be completed by the employee
- Performs services under the company's name
- Paid a salary, reimbursed expenses, participated in company's fringe benefits
- Given tools, equipment, training, and materials to perform job
-If an outside sales person - the company provides leads, sets terms, assigns territory,
and controls the sales process
Common Law Test - Independent Contractor -answer- - Sets own hours and determines
their own work sequence
- Can work for multiple employers and their services are available to the public
- Is self-employed
- Governs how the contract relationship can be severed
- Works by the job
- Permitted to employ assistants
- Performs services under their own name
- Payment by the job
- Provides their own tools, equipment, and training
- Controls their own sales process and terms
Reasonable Basis Test -answer- The exception to the Common Law Test
,Employers can classify a worker as an independent contractor if the worker meets the
following requirement:
- if the employer files a 1099 on behalf of the worker
- there is a longstanding and recognized practice in a significant segment of the
employer's industry of treating similar workers as independent contractors
- Judicial precedent of treating workers in similar circumstances as independent
contractors
- IRS has ruled in a "published ruling" that the workers are independent contractors
- Received a private ruling from the IRS (a letter) stating that the workers are
independent contractors
- Have had a past IRS employment audit that did not disallow the workers treatment as
an independent contractor
- Have received guidance from an attorney or CPA that the worker should be classified
as an independent contractor
Immigration Reform and Control Act of 1986 -answer- Federal law requiring employers
to verify and maintain records on applicants' legal rights to work in the United States
FINES:
$559-$4,473 first offense for each illegal worker hired
$4,473-$11,181 for second offense
$6,709-$22,363 for more an two offenses
Verification for eligibility to work -answer- - Burden falls on the employer
- Form I-9 needs to be filled out within 3 days of the employees first day of work
- Must verify the employees eligibility to work through the DHS E-Verify system
Social Security Verification -answer- - IRS regulations require that employees provide
employers with their social security card when requested
- SSA (social security administration) encourages:
- employers verify employees name and SSN on the W4 form as a part of the hiring
process
Form SS-5 -answer- Application for a SS Card
New Hire Reporting -answer- - Can be done using form W4
- Employer must provide:
- Employees name, address, SSN, and date that employment began
- Employers name, address, and FEIN
- New hire reporting must be completed within 20 days
- If an employee breaks employment for more than 60 days, upon return they must go
through new hire reporting again
, - New hire reporting does not apply to independent contractors
Fair Labor Standards Act of 1938 (FLSA) -answer- A federal law that
- guarantees employees minimum wage
- Requires employers to pay overtime premiums
- Limits when minors can work
- Provides equal pay protection
Exempt employees -answer- Employees not covered by the overtime provisions of the
Fair Labor Standards Act
Ex. executives (direct the work of at least 2 full time EE, have hiring/firing power,
discretionary powers, and make at least $23,660/yr.), administrative (perform office
work or work in school system support and exercise independent judgement in
decisions), professionals, and outside salespeople (must work away from company's
main office, no min salary)
A weekly minimum salary must be met - $455/wk
Non-Exempt Employees -answer- employees covered by the FLSA requirements for
minimum wage and overtime pay
Ex.
Federal Minimum Wage -answer- $7.25/hour
Employees under 20 y/o can be paid $4.25 for the first 90 days
Federal govt contractors must pay $10.60/hr in 2019
State vs. Federal Minimum Wage -answer- If the state has a higher minimum wage than
the federal, the employer must honor the higher rate
tip credit (FLSA) -answer- A tip is a gift or gratuity given for a services performed
Restaurant workers may be paid less than minimum wage ($2.13/hr) if the employee
makes more than $30 per month in tips
The choice given to operations that employ tipped employees to pay the basic minimum
wage or to pay a reduced cash wage and use a tip credit
shift premium -answer- This is not a federal or state requirement but is up to the
discretion of the employer
Extra payment for non-standard work hours
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