ASA Compensation, Benefits & Payroll Management 3

Question 1

What is a 'temp-to-perm' conversion fee, and who typically pays it?

Accepted Answer

A fee paid by the client to the agency when hiring a temporary worker as a permanent employee

Answer

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.

Question 2

Which federal law requires employers, including staffing agencies, to notify workers of their rights regarding health coverage continuation when they lose eligibility?

Accepted Answer

COBRA

Answer

COBRA (Consolidated Omnibus Budget Reconciliation Act) requires employers with 20+ employees to offer continuation of group health coverage to employees who lose eligibility.

Question 3

When a staffing agency uses a Vendor Management System (VMS), what is the typical financial implication?

Accepted Answer

A VMS fee or rebate is deducted from the agency's bill rate, compressing margins

Answer

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.

Question 4

Under the Equal Pay Act, what must a staffing agency ensure when placing workers at a client site?

Accepted Answer

Male and female workers performing substantially equal work receive equal compensation

Answer

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.

Question 5

Which payroll practice helps staffing agencies manage cash flow when clients have 30-60 day payment terms but workers must be paid weekly?

Accepted Answer

Invoice factoring or accounts receivable financing

Answer

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.

(ASA) American Staffing Association Certifications Practice Test

(ASA) American Staffing Association Certifications Practice Test

ASA Compensation, Benefits & Payroll Management 3