ASA Compensation, Benefits & Payroll Management 2

Question 1

When calculating a temporary worker's fully loaded cost, which of the following is NOT typically included in the burden rate?

Accepted Answer

The worker's personal health insurance copays

Answer

Employee copays are a personal expense, not an employer cost; the burden rate includes employer-paid items like FICA, SUI, workers' comp, and benefits.

Question 2

Under ERISA, what is the primary obligation of staffing firms that sponsor employee benefit plans?

Accepted Answer

Act as fiduciaries and manage plan assets in participants' best interests

Answer

ERISA imposes fiduciary duties on plan sponsors, requiring them to act prudently and exclusively in the interest of plan participants and beneficiaries.

Question 3

A staffing agency's workers' compensation experience modification rate (EMR) directly affects which cost component?

Accepted Answer

Workers' compensation insurance premium

Answer

The EMR is a multiplier applied to the base workers' compensation premium — a lower EMR means lower premiums, reflecting better safety records.

Question 4

Which classification error creates the greatest payroll tax and benefits liability risk for a staffing agency?

Accepted Answer

Misclassifying an employee as an independent contractor

Answer

Misclassifying employees as independent contractors causes the agency to avoid payroll taxes and benefits obligations, creating significant back-tax, penalty, and audit liability.

Question 5

What is the primary purpose of the IRS 'ABC test' alternative used in some states to determine worker classification?

Accepted Answer

To establish whether a worker is an employee or an independent contractor

Answer

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.

(ASA) American Staffing Association Certifications Practice Test

(ASA) American Staffing Association Certifications Practice Test

ASA Compensation, Benefits & Payroll Management 2