CSP CSP Compensation & Benefits Administration 2 — Questions and Answers
Question 1: Under the Affordable Care Act (ACA), at how many full-time equivalent employees must a staffing agency offer health coverage to avoid penalties?
- 25 FTEs
- 50 FTEs (Correct answer)
- 75 FTEs
- 100 FTEs
Correct answer: 50 FTEs
The ACA employer mandate applies to Applicable Large Employers (ALEs) with 50 or more full-time equivalent employees, requiring them to offer minimum essential coverage.
Question 2: Which federal law governs pension and benefit plan requirements for staffing agency employees?
- COBRA
- WARN Act
- ERISA (Correct answer)
- FMLA
Correct answer: ERISA
ERISA (Employee Retirement Income Security Act) sets minimum standards for pension and health benefit plans in private industry, including those offered by staffing agencies.
Question 3: What is a 'pay stub' requirement under most U.S. state wage laws for staffing employees?
- Workers must submit timesheets monthly
- Employees must receive an itemized statement of wages and deductions each pay period (Correct answer)
- Agencies must post pay rates publicly
- Employees must sign salary agreements annually
Correct answer: Employees must receive an itemized statement of wages and deductions each pay period
Most states require employers to provide employees with an itemized pay stub each pay period showing gross wages, deductions, and net pay.
Question 4: What is the purpose of a 'markup' in staffing agency pricing?
- To penalize clients for late payment
- To cover agency overhead, profit, taxes, and benefits beyond the base pay rate (Correct answer)
- To reflect higher worker qualifications
- To account for candidate relocation costs
Correct answer: To cover agency overhead, profit, taxes, and benefits beyond the base pay rate
The agency markup above the worker's pay rate covers employer taxes (FICA, FUTA, SUTA), workers' comp, benefits, overhead, and profit margin.
Question 5: Which payroll tax is split equally between the employer (staffing agency) and the employee?
- Federal income tax
- FICA (Social Security and Medicare) (Correct answer)
- FUTA
- SUTA
Correct answer: FICA (Social Security and Medicare)
FICA taxes (Social Security at 6.2% and Medicare at 1.45%) are each paid at the same rate by both employer and employee, totaling 15.3% combined.
Question 6: When must overtime be paid to a non-exempt staffing employee under federal law?
- After 8 hours in a single day
- After 40 hours in a workweek (Correct answer)
- After 80 hours in a two-week period
- After 35 hours in a workweek
Correct answer: After 40 hours in a workweek
Under the FLSA, non-exempt employees must receive at least 1.5 times their regular rate for all hours worked beyond 40 in a single workweek.
CSP CSP Compensation & Benefits Administration 2
Under the Affordable Care Act (ACA), at how many full-time equivalent employees must a staffing agency offer health coverage to avoid penalties?