ASA Compensation, Benefits & Payroll Management 1 — Questions and Answers
Question 1: Under the Fair Labor Standards Act (FLSA), what is the standard overtime threshold requiring time-and-a-half pay for non-exempt employees?
- More than 35 hours per week
- More than 40 hours per week (Correct answer)
- More than 45 hours per week
- More than 48 hours per week
Correct answer: More than 40 hours per week
The FLSA requires overtime pay at 1.5x the regular rate for all hours worked beyond 40 in a workweek for non-exempt employees.
Question 2: Which IRS form must staffing agencies use to report wages paid to temporary employees?
- Form 1099-NEC
- Form W-2 (Correct answer)
- Form 1099-MISC
- Form W-9
Correct answer: Form W-2
Temporary employees on the staffing agency's payroll are W-2 employees, so agencies must issue Form W-2 to report their wages.
Question 3: What term describes the markup rate a staffing agency adds to the worker's pay rate when billing a client?
- Gross margin
- Bill rate multiplier (Correct answer)
- Burden rate
- Load factor
Correct answer: Bill rate multiplier
The bill rate multiplier (or bill rate) is the markup applied to the pay rate to cover employer costs and profit when invoicing the client.
Question 4: Which component of a temporary employee's total cost package covers employer-paid Social Security and Medicare taxes?
- Workers' compensation premium
- FICA taxes (Correct answer)
- FUTA contributions
- SUI taxes
Correct answer: FICA taxes
FICA (Federal Insurance Contributions Act) taxes cover the employer's share of Social Security (6.2%) and Medicare (1.45%) for each employee.
Question 5: Under the Affordable Care Act, staffing agencies that qualify as Applicable Large Employers (ALEs) must offer health coverage to employees working at least how many hours per week?
- 20 hours per week
- 25 hours per week
- 30 hours per week (Correct answer)
- 35 hours per week
Correct answer: 30 hours per week
The ACA defines full-time employees as those working 30 or more hours per week, triggering the employer mandate for ALEs.
Question 6: What is the purpose of a co-employment arrangement in the staffing industry?
- To allow the client to directly pay the worker without agency involvement
- To share employer responsibilities between the staffing agency and the client company (Correct answer)
- To eliminate workers' compensation liability entirely
- To classify workers as independent contractors
Correct answer: To share employer responsibilities between the staffing agency and the client company
Co-employment means the staffing agency and client company each hold certain employer obligations — typically the agency handles payroll/benefits while the client supervises work.
Question 7: Which federal payroll tax funds unemployment benefits at the federal level and is paid solely by the employer?
- FICA
- SUTA
- FUTA (Correct answer)
- ERISA
Correct answer: FUTA
FUTA (Federal Unemployment Tax Act) is an employer-only tax that funds federal unemployment administration and provides a safety net above state programs.
ASA Compensation, Benefits & Payroll Management 1
Under the Fair Labor Standards Act (FLSA), what is the standard overtime threshold requiring time-and-a-half pay for non-exempt employees?