OCPS Case Analysis & Practical Application 2 — Questions and Answers
Question 1: A construction company pays a worker $22/hr regular and $33/hr overtime. The worker logged 50 hours in a week. What is the total gross pay?
- $990
- $1,210 (Correct answer)
- $1,100
- $1,430
Correct answer: $1,210
Regular pay: 40×$22=$880; overtime pay: 10×$33=$330; total=$1,210.
Question 2: An employee claims exempt status on their W-4 but earned $15,000 in the prior year and expects the same this year. What should the payroll processor do?
- Honor the exemption as claimed (Correct answer)
- Withhold at single/zero allowances instead
- Flag the claim and request a new W-4 next year
- Immediately revoke exempt status and notify the IRS
Correct answer: Honor the exemption as claimed
Employers must honor a valid exempt W-4 claim; the IRS, not the employer, enforces eligibility.
Question 3: A company discovers it over-withheld $200 in Social Security tax from an employee's paycheck. What is the correct corrective action?
- Issue a bonus check for $200
- Refund via the next paycheck and file a corrected 941 (Correct answer)
- Adjust the W-2 at year-end only
- Do nothing; the employee claims it on their tax return
Correct answer: Refund via the next paycheck and file a corrected 941
Over-withheld Social Security should be refunded to the employee on a subsequent payroll and corrected on Form 941-X.
Question 4: A semi-monthly pay schedule results in how many paychecks per year?
- 24 (Correct answer)
- 26
- 52
- 12
Correct answer: 24
Semi-monthly means twice per month × 12 months = 24 paychecks annually.
Question 5: An employer in California fails to pay a terminated employee their final wages within 72 hours of resignation. What penalty may apply?
- A flat $500 IRS fine
- Waiting time penalties equal to one day's wages per day late, up to 30 days (Correct answer)
- A 10% interest charge on unpaid wages
- No penalty; only civil action applies
Correct answer: Waiting time penalties equal to one day's wages per day late, up to 30 days
California Labor Code Section 203 imposes waiting time penalties of one day's wages per day the wages remain unpaid, up to 30 days.
Question 6: When processing a garnishment, which payment takes priority over a child support order?
- Federal tax levy (Correct answer)
- Student loan garnishment
- Credit card judgment
- Medical debt garnishment
Correct answer: Federal tax levy
Federal tax levies from the IRS take priority over child support orders received after the levy.
Question 7: A company uses a biweekly payroll. An employee's annual salary is $78,000. What is the gross pay per period?
- $3,000 (Correct answer)
- $6,500
- $3,250
- $1,500
Correct answer: $3,000
$78,000 ÷ 26 pay periods = $3,000 gross per biweekly period.
OCPS Case Analysis & Practical Application 2
A construction company pays a worker $22/hr regular and $33/hr overtime.
The worker logged 50 hours in a week.
What is the total gross pay?