CPM Compliance and Legal Requirements 2 — Questions and Answers
Question 1: Under the Child Support Enforcement Act, what is the maximum percentage of disposable earnings that can be withheld for child support when an employee is NOT supporting another family and is NOT in arrears?
- 50% (Correct answer)
- 55%
- 60%
- 65%
Correct answer: 50%
When an employee is not supporting another spouse/child and is not 12+ weeks in arrears, the CCPA cap is 50% of disposable earnings.
Question 2: Which federal law requires employers to provide employees with a Summary Plan Description (SPD) for benefit plans?
- COBRA
- ERISA (Correct answer)
- HIPAA
- ACA
Correct answer: ERISA
ERISA requires plan administrators to furnish participants with an SPD describing plan benefits, rights, and obligations.
Question 3: An employer receives a federal tax levy (IRS Form 668-W). How is the exempt amount from levy determined?
- It is a flat $1,000 per pay period
- It is based on the employee's standard deduction and personal exemptions claimed on a Statement of Exemptions (Correct answer)
- It equals 25% of disposable earnings
- The employer decides based on employee hardship
Correct answer: It is based on the employee's standard deduction and personal exemptions claimed on a Statement of Exemptions
The IRS provides Publication 1494 tables; the exempt amount is based on the pay period, filing status, and exemptions the employee claims on Form 668-W Part 3.
Question 4: Which provision of the Affordable Care Act requires applicable large employers (ALEs) to report health coverage information to the IRS?
- Section 125
- Section 4980H
- Section 6056 (Correct answer)
- Section 3121
Correct answer: Section 6056
IRC Section 6056 requires ALEs to file Forms 1094-C and 1095-C to report health coverage offers to the IRS.
Question 5: Under the Uniformed Services Employment and Reemployment Rights Act (USERRA), how long does an employee on military leave have to apply for reemployment after a service period of 31–180 days?
- 14 days after release
- 30 days after release (Correct answer)
- 90 days after release
- 1 year after release
Correct answer: 30 days after release
For service of 31–180 days, the employee must submit a reemployment application within 14 days — but for over 180 days the window is 90 days.
Question 6: Which act prohibits employers from discriminating against employees whose wages are being garnished for a single debt?
- Fair Labor Standards Act
- Consumer Credit Protection Act Title III (Correct answer)
- Equal Pay Act
- Federal Wage Garnishment Law Amendments Act
Correct answer: Consumer Credit Protection Act Title III
Title III of the CCPA prohibits employers from discharging an employee because earnings have been garnished for any one debt.
Question 7: An employee's Form W-4 claims 'exempt' from federal income tax withholding. When does this exemption expire and require a new W-4?
- December 31 of the year filed
- February 15 of the following year (Correct answer)
- June 30 of the following year
- It never expires until revoked
Correct answer: February 15 of the following year
A claim of exempt status on Form W-4 expires on February 15 of the following year; the employee must submit a new W-4 to continue the exemption.
CPM Compliance and Legal Requirements 2
Under the Child Support Enforcement Act, what is the maximum percentage of disposable earnings that can be withheld for child support when an employee is NOT supporting another family and is NOT in arrears?