Fundamental Payroll Certification Fundamental Payroll Involuntary and Voluntary Deductions 2

Question 1

Under the CCPA, what is the maximum garnishment percentage of disposable earnings for child support when the employee IS supporting another spouse or dependent and is NOT in arrears?

Accepted Answer

50%

Answer

CCPA allows up to 50% of disposable earnings for child support when the employee supports a current spouse or dependent and is not more than 12 weeks in arrears.

Question 2

Which federal law establishes limits on the amount of employee wages that can be garnished and prohibits termination due to a single garnishment?

Accepted Answer

Consumer Credit Protection Act (CCPA)

Answer

Title III of the CCPA limits wage garnishment amounts and protects employees from discharge solely because their wages are garnished for one debt.

Question 3

Which of the following correctly defines 'disposable earnings' for garnishment calculation purposes?

Accepted Answer

Gross earnings minus legally required deductions

Answer

Disposable earnings equal gross wages minus only legally required deductions such as federal, state, and local income taxes and mandatory retirement contributions.

Question 4

For creditor garnishments, CCPA protects a weekly floor equal to how many times the federal minimum wage?

Accepted Answer

30 times

Answer

Employees must retain at least 30 times the federal hourly minimum wage per week, forming an income floor that cannot be touched by creditor garnishments.

Question 5

An employee's disposable earnings are $500 per week. The federal minimum wage is $7.25/hour. What is the maximum creditor garnishment amount?

Accepted Answer

$125.00

Answer

The lesser of 25% of $500 ($125) or the amount above 30x $7.25 ($500 - $217.50 = $282.50) is $125, which is the maximum garnishable amount.

Fundamental Payroll Certification Practice Test

Fundamental Payroll Certification Practice Test

Fundamental Payroll Certification Fundamental Payroll Involuntary and Voluntary Deductions 2