Compliance and Legal Requirements Flashcards
7 cards from real CPM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Compliance and Legal Requirements flashcards as text
Which section of the Internal Revenue Code imposes a 100% Trust Fund Recovery Penalty (TFRP) on responsible persons who willfully fail to collect or pay over employment taxes?
Answer: IRC Section 6672
IRC Section 6672 authorizes the IRS to assess the TFRP equal to 100% of unpaid trust fund taxes against responsible persons.
Under the Electronic Fund Transfer Act (EFTA), can an employer require direct deposit as a condition of employment?
Answer: Yes, if the employee can choose any financial institution
Some states allow mandatory direct deposit but the EFTA requires employee choice of financial institution if direct deposit is mandated.
Which federal law specifically governs employer obligations regarding continuation of group health coverage after qualifying events such as termination of employment?
Answer: COBRA (Consolidated Omnibus Budget Reconciliation Act)
COBRA requires employers with 20+ employees to offer continuation of group health plan coverage to qualified beneficiaries after qualifying events.
An employer is served with an out-of-state child support income withholding order. Under the Uniform Interstate Family Support Act (UIFSA), what must the employer do?
Answer: Honor the order as if issued by the employee's home state
Under UIFSA, employers must honor an income withholding order issued by another state's tribunal without requiring the order to be registered locally.
What is the purpose of the IRS lock-in letter (Letter 2800C)?
Answer: To instruct the employer to withhold at a specific higher rate regardless of the employee's W-4
A lock-in letter directs the employer to withhold at a minimum rate specified by the IRS, overriding any W-4 the employee submits claiming fewer withholdings.
Under the Walsh-Healey Public Contracts Act, which workers are covered?
Answer: Employees of federal contractors manufacturing or supplying goods under contracts exceeding $15,000
The Walsh-Healey Act applies to manufacturers or dealers supplying goods to the federal government under contracts exceeding $15,000.
Under the Sarbanes-Oxley Act (SOX), what payroll record retention requirement applies to publicly traded companies?
Answer: Payroll records must be retained for 7 years
SOX Section 802 requires retention of audit-relevant financial records, including payroll records, for a minimum of 7 years.