CPM Compliance and Legal Requirements 3 — Questions and Answers
Question 1: Under the Family and Medical Leave Act (FMLA), what is the maximum leave entitlement for a covered employee caring for a servicemember with a serious injury or illness?
- 12 weeks
- 16 weeks
- 20 weeks
- 26 weeks (Correct answer)
Correct answer: 26 weeks
Military caregiver leave under FMLA allows up to 26 workweeks in a single 12-month period for eligible employees.
Question 2: Which IRS form must an employer file to report nonpayroll federal income tax withholding (e.g., backup withholding on dividends)?
- Form 941
- Form 944
- Form 945 (Correct answer)
- Form 943
Correct answer: Form 945
Form 945 is used to report withheld federal income tax from nonpayroll payments such as pensions, gambling winnings, and backup withholding.
Question 3: Under the Immigration Reform and Control Act (IRCA), within how many business days of hire must an employee complete Section 1 of Form I-9?
- On or before the first day of employment (Correct answer)
- Within 3 business days of the first day of employment
- Within 5 business days of the first day of employment
- Within 7 calendar days of the first day of employment
Correct answer: On or before the first day of employment
Employees must complete Section 1 of Form I-9 no later than the first day of employment for pay.
Question 4: Which FLSA exemption applies to employees in administrative roles who primarily perform office work directly related to management or general business operations AND exercise discretion and independent judgment?
- Executive exemption
- Administrative exemption (Correct answer)
- Professional exemption
- Highly compensated employee exemption
Correct answer: Administrative exemption
The administrative exemption requires the employee to exercise discretion and independent judgment with respect to matters of significance.
Question 5: An employee subject to state income tax moves mid-year from California to Nevada, which has no state income tax. How should the employer handle state withholding for the year?
- Continue California withholding for the full year
- Switch entirely to Nevada withholding on the move date
- Withhold California tax for the period worked in California and no state tax after the move date (Correct answer)
- File a combined return splitting wages equally between states
Correct answer: Withhold California tax for the period worked in California and no state tax after the move date
Wages are generally taxable by the state where the work is performed, so California withholding applies only to the portion of wages earned while the employee lived and worked there.
Question 6: What is the penalty for an employer who fails to make timely federal payroll tax deposits and the failure is due to reasonable cause rather than willful neglect?
- No penalty applies if reasonable cause is shown
- 2% to 15% failure-to-deposit penalty, potentially reduced or waived (Correct answer)
- A flat $500 per missed deposit
- Criminal prosecution under IRC Section 7202
Correct answer: 2% to 15% failure-to-deposit penalty, potentially reduced or waived
The FTD penalty ranges from 2%–15% based on how late the deposit is, and the IRS may waive it upon showing reasonable cause.
Question 7: Under the Age Discrimination in Employment Act (ADEA), which age group is protected from employment discrimination?
- Employees over age 18
- Employees ages 40 and older (Correct answer)
- Employees ages 50 and older
- Employees ages 55 and older
Correct answer: Employees ages 40 and older
The ADEA protects individuals who are 40 years of age or older from employment discrimination based on age.
CPM Compliance and Legal Requirements 3
Under the Family and Medical Leave Act (FMLA), what is the maximum leave entitlement for a covered employee caring for a servicemember with a serious injury or illness?