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
What is a 'temp-to-perm' conversion fee, and who typically pays it?
Answer: A fee paid by the client to the agency when hiring a temporary worker as a permanent employee
A conversion fee (also called a buyout fee) is charged by the staffing agency to the client when they permanently hire a temp worker, compensating the agency for placement services.
Which federal law requires employers, including staffing agencies, to notify workers of their rights regarding health coverage continuation when they lose eligibility?
Answer: COBRA
COBRA (Consolidated Omnibus Budget Reconciliation Act) requires employers with 20+ employees to offer continuation of group health coverage to employees who lose eligibility.
When a staffing agency uses a Vendor Management System (VMS), what is the typical financial implication?
Answer: A VMS fee or rebate is deducted from the agency's bill rate, compressing margins
VMS platforms typically charge a fee (funded via a discount off the agency's bill rate), reducing the agency's gross margin on client-managed programs.
Under the Equal Pay Act, what must a staffing agency ensure when placing workers at a client site?
Answer: Male and female workers performing substantially equal work receive equal compensation
The Equal Pay Act prohibits sex-based wage discrimination, requiring equal pay for men and women performing jobs that demand equal skill, effort, and responsibility.
Which payroll practice helps staffing agencies manage cash flow when clients have 30-60 day payment terms but workers must be paid weekly?
Answer: Invoice factoring or accounts receivable financing
Invoice factoring allows agencies to sell their receivables to a third party for immediate cash, bridging the gap between weekly payroll obligations and client payment terms.
What is the 'spread' in staffing agency economics?
Answer: The difference between the bill rate charged to the client and the pay rate given to the worker
The spread (gross margin dollars) is the difference between the client bill rate and the worker's pay rate, from which the agency covers burden costs and generates profit.
A staffing agency operating in multiple states must comply with varying minimum wage laws. When state and federal minimum wages differ, which applies?
Answer: Whichever rate is higher
Employees are entitled to the higher of the applicable federal or state minimum wage, so agencies must pay at least the state rate when it exceeds the federal floor.