Compensation, Benefits & Payroll Management Flashcards
7 cards from real ASA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Compensation, Benefits & Payroll Management flashcards as text
When calculating a temporary worker's fully loaded cost, which of the following is NOT typically included in the burden rate?
Answer: The worker's personal health insurance copays
Employee copays are a personal expense, not an employer cost; the burden rate includes employer-paid items like FICA, SUI, workers' comp, and benefits.
Under ERISA, what is the primary obligation of staffing firms that sponsor employee benefit plans?
Answer: Act as fiduciaries and manage plan assets in participants' best interests
ERISA imposes fiduciary duties on plan sponsors, requiring them to act prudently and exclusively in the interest of plan participants and beneficiaries.
A staffing agency's workers' compensation experience modification rate (EMR) directly affects which cost component?
Answer: Workers' compensation insurance premium
The EMR is a multiplier applied to the base workers' compensation premium — a lower EMR means lower premiums, reflecting better safety records.
Which classification error creates the greatest payroll tax and benefits liability risk for a staffing agency?
Answer: Misclassifying an employee as an independent contractor
Misclassifying employees as independent contractors causes the agency to avoid payroll taxes and benefits obligations, creating significant back-tax, penalty, and audit liability.
What is the primary purpose of the IRS 'ABC test' alternative used in some states to determine worker classification?
Answer: To establish whether a worker is an employee or an independent contractor
The ABC test (used in states like California under AB5) determines whether a worker is an employee or independent contractor based on control, business integration, and independent trade criteria.
In the staffing industry, what does 'pay-rolling' refer to?
Answer: Placing a client-recruited worker on the agency's payroll to handle employer obligations
Pay-rolling (or payrolling) occurs when a client finds their own candidate but uses the staffing agency to process payroll, benefits, and employer compliance.
Which IRS form is used to document that a temporary worker has provided their Social Security Number and verified their tax withholding elections?
Answer: Form W-4
Form W-4 is the Employee's Withholding Certificate, used to capture the worker's SSN and federal income tax withholding allowances for payroll purposes.