OCPS Regulatory Compliance & Legal Framework 2 — Questions and Answers
Question 1: Under the Portal-to-Portal Act, which activity is generally NOT compensable under the FLSA?
- Walking from a parking lot to the worksite (Correct answer)
- Time spent donning required safety gear that is integral to the job
- Traveling between job sites during the workday
- Waiting for work while on the employer's premises
Correct answer: Walking from a parking lot to the worksite
The Portal-to-Portal Act generally excludes commuting time, including walking from a parking lot to the worksite, from FLSA compensable time.
Question 2: Which IRS form must employers use to report nonemployee compensation of $600 or more paid during the tax year?
- Form W-2
- Form 1099-NEC (Correct answer)
- Form 1099-MISC
- Form 941
Correct answer: Form 1099-NEC
Form 1099-NEC (Nonemployee Compensation) was reinstated in 2020 specifically for reporting payments of $600 or more to independent contractors.
Question 3: The Employee Retirement Income Security Act (ERISA) primarily governs which aspect of employment?
- Minimum wage and overtime requirements
- Anti-discrimination protections in hiring
- Private-sector employee benefit plans (Correct answer)
- Occupational safety and health standards
Correct answer: Private-sector employee benefit plans
ERISA sets minimum standards for most voluntarily established retirement and health plans in private industry to protect employees.
Question 4: A state's overtime law requires overtime after 8 hours in a workday, while federal FLSA requires overtime only after 40 hours in a workweek. Which rule applies?
- Federal law always preempts state law
- The state daily overtime rule applies because it is more beneficial to the employee (Correct answer)
- The employer may choose whichever standard costs less
- State overtime laws are unenforceable if the employee is covered by FLSA
Correct answer: The state daily overtime rule applies because it is more beneficial to the employee
Under FLSA, when state law provides greater protections to employees than federal law, employers must comply with the higher state standard.
Question 5: What does the term 'backup withholding' refer to in payroll contexts?
- Withholding additional federal tax at the employee's written request
- A 24% withholding rate applied when a payee fails to provide a correct TIN (Correct answer)
- State tax withheld as a backup when no state form is filed
- Supplemental withholding on bonuses above $1 million
Correct answer: A 24% withholding rate applied when a payee fails to provide a correct TIN
Backup withholding at 24% is required when a payee does not furnish a correct taxpayer identification number or is otherwise subject to backup withholding.
Question 6: Under the Uniformed Services Employment and Reemployment Rights Act (USERRA), what is the maximum military leave period after which an employee retains reemployment rights?
- 90 days
- 1 year
- 3 years
- 5 years (Correct answer)
Correct answer: 5 years
USERRA protects reemployment rights for veterans who have been absent from employment for up to five cumulative years due to military service.
Question 7: Which penalty applies when an employer willfully fails to pay required FLSA overtime wages?
- A fine of $100 per affected employee per violation
- Double the unpaid wages as liquidated damages plus potential criminal penalties (Correct answer)
- A 10% surcharge on unpaid wages only
- Loss of federal contract eligibility for two years
Correct answer: Double the unpaid wages as liquidated damages plus potential criminal penalties
Willful FLSA violations can result in liquidated damages equal to the unpaid wages, plus criminal prosecution with fines up to $10,000 or imprisonment.
OCPS Regulatory Compliance & Legal Framework 2
Under the Portal-to-Portal Act, which activity is generally NOT compensable under the FLSA?