CPC Compensation & Benefits Administration 2 — Questions and Answers
Question 1: A company wants to ensure its base salaries remain competitive in the market. Which survey methodology provides the most reliable external benchmark data?
- Informal peer networking calls
- Structured third-party compensation surveys with matched job content (Correct answer)
- Internal employee opinion polls
- Glassdoor self-reported salary data only
Correct answer: Structured third-party compensation surveys with matched job content
Third-party compensation surveys using matched job content provide statistically reliable market data because they standardize job comparisons across organizations.
Question 2: Under the Fair Labor Standards Act (FLSA), which worker classification determines eligibility for overtime pay?
- Salaried vs. hourly
- Full-time vs. part-time
- Exempt vs. non-exempt (Correct answer)
- Permanent vs. temporary
Correct answer: Exempt vs. non-exempt
The FLSA classifies workers as exempt or non-exempt based on salary level, salary basis, and job duties tests; non-exempt employees must receive overtime pay.
Question 3: A recruiter places a candidate who accepts a role with a $90,000 base salary. The staffing firm's fee is 20% of first-year compensation. What is the placement fee?
- $15,000
- $18,000 (Correct answer)
- $20,000
- $22,500
Correct answer: $18,000
$90,000 × 0.20 = $18,000 is the placement fee based on first-year base salary.
Question 4: Which type of health insurance plan typically offers the lowest out-of-pocket costs when employees use network providers but requires primary care physician referrals?
- Preferred Provider Organization (PPO)
- Health Maintenance Organization (HMO) (Correct answer)
- High-Deductible Health Plan (HDHP)
- Exclusive Provider Organization (EPO)
Correct answer: Health Maintenance Organization (HMO)
HMOs generally have lower premiums and out-of-pocket costs but require members to select a primary care physician and get referrals for specialists.
Question 5: What is the primary purpose of a salary range midpoint in a compensation structure?
- To set the maximum anyone in the role can earn
- To represent the market rate for a fully competent performer in the role (Correct answer)
- To determine the minimum wage floor required by law
- To calculate total compensation including bonuses
Correct answer: To represent the market rate for a fully competent performer in the role
The midpoint of a salary range is designed to reflect the competitive market rate for a fully proficient employee in that position.
Question 6: An employer contributes 3% of each employee's salary to a 401(k) plan regardless of whether the employee contributes. This is best described as a:
- Safe harbor matching contribution
- Non-elective contribution (Correct answer)
- Profit-sharing contribution
- Discretionary match
Correct answer: Non-elective contribution
A non-elective contribution is made by the employer for all eligible employees without requiring any employee contribution.
Question 7: Which pay equity concept focuses on ensuring that jobs of comparable worth to the organization receive comparable pay, even across different job families?
- Equal pay for equal work
- Comparable worth / pay equity (Correct answer)
- Market-based compensation
- Internal equity
Correct answer: Comparable worth / pay equity
Comparable worth (pay equity) holds that jobs of similar value to the employer — even in different job families — should receive similar compensation to eliminate gender-based wage gaps.
CPC Compensation & Benefits Administration 2
A company wants to ensure its base salaries remain competitive in the market.
Which survey methodology provides the most reliable external benchmark data?