Practice Test Geeks(CPS) Certified Payroll Specialist Practice Test
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Regulatory Compliance & Standards Flashcards

7 cards from real CPS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Regulatory Compliance & Standards flashcards as text

  1. Which of the following best describes the 'economic reality' test used to determine worker classification?

    Answer: Whether the worker is economically dependent on the employer or operates independently

    The economic reality test examines whether, as a matter of economic reality, the worker is economically dependent on the employer for work, indicating employee status.

  2. Under IRS regulations, what is the standard mileage rate primarily used for when applied to business travel in payroll?

    Answer: Reimbursing employees for business use of personal vehicles

    The IRS standard mileage rate provides a simplified method for employers to reimburse employees for business use of their personal vehicles tax-free.

  3. An employer fails to deposit payroll taxes on time. Under the Trust Fund Recovery Penalty (TFRP), who can be held personally liable?

    Answer: Any responsible person who willfully failed to collect or pay over the taxes

    The TFRP can be assessed against any 'responsible person' — anyone with authority over financial decisions — who willfully failed to remit trust fund taxes.

  4. The Davis-Bacon Act requires payment of prevailing wages on what type of projects?

    Answer: Federal and federally assisted construction contracts over $2,000

    The Davis-Bacon Act applies to federal and federally assisted construction contracts exceeding $2,000, requiring payment of locally prevailing wages.

  5. Which section of the Internal Revenue Code governs cafeteria plans that allow employees to choose between taxable and nontaxable benefits?

    Answer: Section 125

    IRC Section 125 governs cafeteria plans, allowing employees to select among qualifying benefits and pay for them with pre-tax dollars.

  6. Under COBRA, what is the maximum continuation coverage period for a qualifying event that is the covered employee's termination or reduction in hours?

    Answer: 18 months

    For termination or reduction in hours, COBRA generally provides up to 18 months of continuation coverage for qualified beneficiaries.

  7. The McNamara-O'Hara Service Contract Act (SCA) establishes wage and fringe benefit requirements for employees working under federal service contracts exceeding what dollar threshold?

    Answer: $10,000

    The SCA applies to federal service contracts exceeding $2,500, requiring contractors to pay service employees the locally prevailing wage and fringe benefit rates.