PHR Total Rewards 3 — Questions and Answers
Question 1: Which law requires equal pay for men and women performing substantially equal work?
- Title VII
- Equal Pay Act of 1963 (Correct answer)
- Fair Labor Standards Act
- Lilly Ledbetter Fair Pay Act
Correct answer: Equal Pay Act of 1963
The Equal Pay Act of 1963 mandates equal pay for substantially equal work regardless of sex.
Question 2: A pay structure with very few wide salary bands instead of many narrow grades is called:
- Broadbanding (Correct answer)
- Pay compression
- Step structure
- Market pricing
Correct answer: Broadbanding
Broadbanding consolidates many grades into a few wide bands to allow more flexibility.
Question 3: Which retirement plan places investment risk on the employer rather than the employee?
- 401(k) plan
- Defined contribution plan
- Defined benefit plan (Correct answer)
- Roth IRA
Correct answer: Defined benefit plan
A defined benefit (pension) plan guarantees a benefit and places investment risk on the employer.
Question 4: Pay compression most commonly results from which situation?
- Long-tenured employees receiving large raises
- New hires being paid near or above existing staff (Correct answer)
- Eliminating annual bonuses
- Reducing the number of pay grades
Correct answer: New hires being paid near or above existing staff
Pay compression occurs when new hires are paid close to or more than longer-tenured employees.
Question 5: Which federal law governs continuation of group health coverage after job loss?
- HIPAA
- COBRA (Correct answer)
- ERISA
- FMLA
Correct answer: COBRA
COBRA allows eligible employees to continue group health coverage after a qualifying event such as termination.
Question 6: What does ERISA primarily regulate?
- Minimum wage levels
- Employee retirement and welfare benefit plans (Correct answer)
- Overtime pay rules
- Workplace safety standards
Correct answer: Employee retirement and welfare benefit plans
ERISA sets standards for private-sector retirement and welfare benefit plans to protect participants.
Question 7: A bonus tied to overall company profits distributed to employees is known as:
- Gainsharing
- Profit sharing (Correct answer)
- Spot bonus
- Merit increase
Correct answer: Profit sharing
Profit sharing distributes a portion of company profits to employees, usually annually.
PHR Total Rewards 3
Which law requires equal pay for men and women performing substantially equal work?