Fundamental Payroll Certification Trivia 2 — Questions and Answers
Question 1: Which federal agency administers the Fair Labor Standards Act (FLSA)?
- Department of Labor (Correct answer)
- IRS
- Social Security Administration
- Department of Treasury
Correct answer: Department of Labor
The Wage and Hour Division of the Department of Labor enforces the FLSA, which sets minimum wage and overtime rules.
Question 2: What is the standard FUTA tax rate before any state credit reduction?
- 0.6%
- 6.0% (Correct answer)
- 1.45%
- 2.9%
Correct answer: 6.0%
The gross FUTA tax rate is 6.0% on the first $7,000 of each employee's wages, though most employers receive a 5.4% credit reducing it to 0.6%.
Question 3: How many pay stubs must an employer typically retain under federal record-keeping requirements?
- 1 year
- 2 years
- 3 years (Correct answer)
- 5 years
Correct answer: 3 years
The FLSA requires payroll records to be retained for at least 3 years.
Question 4: What form do employees use to claim exemption from federal income tax withholding?
- W-2
- W-4 (Correct answer)
- 1099-NEC
- I-9
Correct answer: W-4
Employees complete Form W-4 to tell employers how much federal income tax to withhold, and can claim exempt status on this form.
Question 5: Which payroll concept describes the total compensation paid before any deductions?
- Net pay
- Take-home pay
- Gross pay (Correct answer)
- Disposable earnings
Correct answer: Gross pay
Gross pay is the total amount earned before taxes, benefits, and other deductions are subtracted.
Question 6: An employee works 50 hours in a workweek at $20/hr. What is their total gross pay under FLSA?
- $1,000
- $1,100 (Correct answer)
- $1,200
- $1,300
Correct answer: $1,100
Regular pay = 40 × $20 = $800; overtime pay = 10 × $30 = $300; total = $1,100.
Question 7: What is the minimum age for an employee to be exempt from FLSA child labor restrictions for non-hazardous work?
- 14
- 16 (Correct answer)
- 18
- 21
Correct answer: 16
Employees aged 16 and older may perform any non-hazardous job for unlimited hours under FLSA.
Fundamental Payroll Certification Trivia 2
Which federal agency administers the Fair Labor Standards Act (FLSA)?