CPP Basic 4 — Questions and Answers
Question 1: Which federal agency enforces the Fair Labor Standards Act (FLSA)?
- IRS
- Department of Labor Wage and Hour Division (Correct answer)
- Social Security Administration
- EEOC
Correct answer: Department of Labor Wage and Hour Division
The Wage and Hour Division (WHD) of the U.S. Department of Labor is responsible for enforcing the FLSA.
Question 2: What is the Social Security wage base for 2024?
- $147,000
- $160,200
- $168,600 (Correct answer)
- $176,100
Correct answer: $168,600
The Social Security (OASDI) wage base for 2024 is $168,600; earnings above this amount are not subject to the 6.2% Social Security tax.
Question 3: A tipped employee earns $2.13/hr in direct wages. If their total tips plus direct wages do not reach federal minimum wage, what must the employer do?
- Allow the employee to keep all tips as a supplement
- Make up the difference so total hourly earnings equal at least the federal minimum wage (Correct answer)
- File a tip credit waiver with the DOL
- Report the shortfall on Form 941
Correct answer: Make up the difference so total hourly earnings equal at least the federal minimum wage
If the tip credit does not bring the employee's total hourly earnings up to the federal minimum wage ($7.25), the employer must pay the difference.
Question 4: Which form must employers use to verify that new hires are legally authorized to work in the United States?
- Form W-4
- Form I-9 (Correct answer)
- Form SS-5
- Form W-9
Correct answer: Form I-9
Form I-9 (Employment Eligibility Verification) must be completed by all new hires to confirm identity and work authorization.
Question 5: Under FLSA, what is the minimum salary threshold for white-collar overtime exemptions as updated in 2024?
- $455 per week
- $684 per week
- $844 per week (Correct answer)
- $1,128 per week
Correct answer: $844 per week
Effective July 1, 2024, the DOL raised the white-collar exemption salary threshold to $844 per week ($43,888 annually).
Question 6: Which payroll concept refers to the employee's pay after all deductions have been subtracted?
- Gross pay
- Taxable wages
- Net pay (Correct answer)
- Disposable earnings
Correct answer: Net pay
Net pay is the amount the employee actually receives after all mandatory and voluntary deductions are subtracted from gross pay.
Question 7: What is a garnishment?
- A voluntary pre-tax deduction elected by the employee
- A court-ordered or legally mandated deduction from an employee's wages (Correct answer)
- An employer contribution to a retirement plan
- A bonus paid to employees who meet performance goals
Correct answer: A court-ordered or legally mandated deduction from an employee's wages
A garnishment is a legally required deduction from an employee's wages to satisfy a debt such as child support, tax levy, or creditor judgment.
CPP Basic 4
Which federal agency enforces the Fair Labor Standards Act (FLSA)?