Fundamental Payroll Certification Fundamental Payroll Worker Status and FLSA 3

Question 1

Which factor is NOT one of the six factors in the DOL's economic reality test for independent contractor status under the FLSA?

Accepted Answer

The worker's geographic location

Answer

Geographic location is not a factor; the DOL's six factors include control, profit/loss opportunity, investment, permanency, integral nature of work, and skill/initiative.

Question 2

An employer has workers classified as independent contractors but controls their daily schedules, provides all equipment, and prohibits them from working for competitors. The IRS would likely reclassify them as:

Accepted Answer

Common law employees

Answer

The IRS common law test looks at behavioral, financial, and type-of-relationship factors; high employer control in all three areas indicates employee status.

Question 3

Under the FLSA, which of the following is considered 'hours worked' for overtime calculation purposes?

Accepted Answer

Time an employee spends waiting on-call at the employer's premises

Answer

On-call time at the employer's premises is hours worked because the employee cannot use that time effectively for personal purposes.

Question 4

A tipped employee's direct cash wage is $2.13/hour. If their tips in a week are insufficient to bring total compensation to the federal minimum wage of $7.25/hour, the employer must:

Accepted Answer

Pay a tip credit make-up to reach $7.25/hour

Answer

The FLSA tip credit requires the employer to pay the difference if the direct wage plus tips do not equal at least the federal minimum wage.

Question 5

Which of the following employees would qualify for the FLSA highly compensated employee (HCE) exemption?

Accepted Answer

An analyst earning $107,432/year who customarily performs one or more exempt duties

Answer

The HCE exemption applies to employees earning at least $107,432 annually who customarily and regularly perform at least one exempt executive, administrative, or professional duty.

Fundamental Payroll Certification Practice Test

Fundamental Payroll Certification Practice Test

Fundamental Payroll Certification Fundamental Payroll Worker Status and FLSA 3