Fundamental Payroll Certification Fundamental Payroll Involuntary and Voluntary Deductions 5

Question 1

An employee's disposable earnings are $300 per week. The federal minimum wage is $7.25/hour. What is the maximum creditor garnishment amount?

Accepted Answer

$75.00

Answer

25% of $300 = $75; amount above 30x $7.25 = $300 - $217.50 = $82.50; the lesser figure of $75 is the maximum that can be garnished.

Question 2

Which of the following deductions is correctly subtracted from gross wages to arrive at 'disposable earnings'?

Accepted Answer

Mandatory state disability insurance contributions

Answer

Only legally required deductions — such as mandatory state disability insurance — reduce gross wages to reach disposable earnings; voluntary elections do not.

Question 3

A child support order alone consumes the full CCPA maximum withholding for an employee. The employer then receives a creditor garnishment. What is the correct employer action?

Accepted Answer

Withhold nothing additional for the creditor and notify the issuing court

Answer

When existing orders already reach the CCPA maximum, no additional amount can be withheld; the employer must notify the creditor's court that the withholding limit is exhausted.

Question 4

An employer receives a garnishment order for an employee who was terminated last week. What must the employer do?

Accepted Answer

Notify the issuing court or agency that the individual is no longer employed

Answer

Upon receiving a garnishment for a terminated employee, the employer must promptly notify the issuing court or agency so enforcement can be redirected appropriately.

Question 5

An employee instructs the employer to direct-deposit their entire paycheck into a personal savings account. A valid creditor garnishment order is also in effect. How should the employer proceed?

Accepted Answer

Apply the garnishment to wages before depositing the remainder

Answer

Wage garnishment attaches to the employee's earnings, not to bank accounts; the employer must withhold the garnishment amount before depositing the remaining balance.

Fundamental Payroll Certification Practice Test

Fundamental Payroll Certification Practice Test

Fundamental Payroll Certification Fundamental Payroll Involuntary and Voluntary Deductions 5