8.4 Employment Law Homework Questions

Question 1

Question CPA-01917

Which of the following parties generally is ineligible to collect workers’ compensation benefits?

1. Union employees.
2. Truck drivers.
3. Temporary office workers.
4. Minors.

Answer 1

Explanation

Choice ‘‘c’’ is correct. Workers’ compensation programs are state run programs designed to enable employees to recover for injuries incurred while on the job. Most employers must participate in the programs; however, there are a few exceptions, including an exception for employers employing casual workers. A temporary office worker would be considered a casual employee.

Choices ‘‘d’’, ‘‘b’’, and ‘‘a’’ are incorrect because there is no exception for minors, truck drivers or union employees.

Question 2

Question CPA-01918

Which of the following statements is(are) correct regarding the authority of the Occupational Safety and Health Administration (OSHA)?

1. OSHA is authorized to establish standards that protect employees from exposure to substances that may be harmful to their health.
2. OSHA is authorized to develop safety equipment and require employers to instruct employees in its use.
3. Both I and II.
4. Neither I nor II.
5. I only.
6. II only.

Answer 2

Explanation

Choice ‘‘c’’ is correct. The general purpose of OSHA is to ensure workplace safety for employees. To further this goal, OSHA is authorized to establish regulations aimed at eliminating workplace hazards of all kinds, including exposure to substances that may be harmful to employees’ health. OSHA is not authorized to actually develop safety equipment, or require instruction for its use.

Question 3

Question CPA-01939

Taxes payable under the Federal Unemployment Tax Act (FUTA) are:

1. Payable by employers for all employees.
2. Deductible by the employer as a business expense for federal income tax purposes.
3. Withheld from the wages of all covered employees.
4. Calculated as a fixed percentage of all compensation paid to an employee.

Answer 3

Explanation

Choice ‘‘b’’ is correct. FUTA tax is payable by the employer. It is deductible as a business expense. It is not withheld and is not payable on all wages.

Choice ‘‘d’’ is incorrect. The FUTA tax is not a fixed rate on all compensation. It applies only up to a $7,000 ceiling.

Choice ‘‘a’’ is incorrect. The FUTA tax applies only to employers who have a quarterly payroll of at least $1,500 or employ at least one employee at least one day a week for 20 weeks during a year.

Choice ‘‘c’’ is incorrect. The employer pays FUTA tax. The tax is not withheld from employees’ wages.

Question 4

Question CPA-01958

Under the Fair Labor Standards Act, if a covered, nonexempt employee works consecutive weeks of 45, 42, 38, and 33 hours, how many hours of overtime must be paid to the employee?

a.

18

b.

0

C.

7

d.

20

Answer 4

Explanation

Choice ‘‘c’’ is correct. Nonexempt employees are entitled to overtime pay whenever they VI/Ork more than 40 hours in any given weekly period. Therefore, the employee is entitled to overtime of five hours from week 1 and 2 hours from week 2. Weeks 3 and 4 do not offset the entitlement.

Question 5

Question CPA-02033

Under which of the following conditions is an on-site inspection of a workplace by an investigator from the Occupational Safety and Health Administration (OSHA) permissible?

1. At the request of employees.
2. Only if the inspection is conducted after working hours.
3. After OSHA provides the employer with at least 24 hours notice of the prospective inspection.
4. Only if OSHA obtains a search warrant after showing probable cause.

Answer 5

Explanation

Choice ‘‘a’’ is correct. OSHA allows inspections at the request of employees. 29 U.S.C. §657(f)(1)

Choice ‘‘d’’ is incorrect. OSHA provides for searches without a warrant based on probable cause. 29 U.S.C.

§657(a)

Choice ‘‘b’’ is incorrect. OSHA provides for searches during regular business hours or at other reasonable times. 29 U.S.C. §657(a)

Choice ‘‘c’’ is incorrect. There is no 24-hour notice requirement.

Question 6

Question CPA-02040

When verifying a client’s compliance with statutes governing employees’ wages and hours, an auditor should check the client’s personnel records against relevant provisions of which of the following statutes?

1. Taft-Hartley Act.
2. National Labor Relations Act.
3. Fair Labor Standards Act.
4. Americans With Disabilities Act.

Answer 6

Explanation

Choice ‘‘c’’ is correct. The Fair Labor Standards Act governs wages and hours.

Choice ‘‘b’’ is incorrect. The National Labor Relations Act governs collective bargaining (i.e., unions) activities. Choice ‘‘a’’ is incorrect. The Taft-Hartley Act governs labor relations.

Choice ‘‘d’’ is incorrect. The ADA prohibits discrimination; it does not govern wages and hours.

Question 7

Question CPA-02072

Under the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), which of the following statements is correct?

1. Employers are prevented from managing retirement plans.
2. Employees are entitled to have an employer established pension plan.
3. Employers are prevented from unduly delaying an employee’s participation in a pension plan.
4. Employees are entitled to make investment decisions.

Answer 7

Explanation

Choice ‘‘c’’ is correct. Employers cannot unduly delay an employee’s participation in a pension plan.

Choice ‘‘b’’ is incorrect. ERISA does not establish a right to a pension plan; it just regulates pension plans if they are adopted.

Choice ‘‘a’’ is incorrect. Under ERISA, employers can manage retirement plans.

Choice ‘‘d’’ is incorrect. ERISA does not give employees an absolute right to make investment decisions.

Question 8

Question CPA-02074

For the entire year year 3, Ral Supermarket, Inc. conducted its business operations without any permanent or full­ time employees. Ral employed temporary and part-time workers during each of the 52 weeks in the year. Under the provisions of the Federal Unemployment Tax Act (FUTA), which of the following statements is correct regarding Ral’s obligation to file a federal unemployment tax return for year 3?

1. Ral is obligated to file a year 3 FUTA return only if at least one worker earned $50 or more in any calendar quarter of year 3.
2. Ral must file a year 3 FUTA return because it had at least one employee during at least 20 weeks of year 3.
3. Ral does not have to file a year 3 FUTA return because it had no permanent or full-time employees in year 3.
4. Ral must file a year 3 FUTA return only if aggregate wages exceeded $100,000 during year 3.

Answer 8

Explanation

Choice ‘‘b’’ is correct. All employers who have quarterly payrolls of at least $1,500 or who employ at least one person one day a week for twenty weeks in a year must participate in FUTA.

Question 9

Question CPA-02079

Which of the following statements correctly describes the funding of noncontributory pension plans?

1. The employer and employee each provide 50°/o of the funds.
2. All of the funds are provided by the employees.
3. All of the funds are provided by the employer.
4. The employer provides 90°/o of the funds, and each employee contributes 10°/o.

Answer 9

Explanation

Choice ‘‘c’’ is correct. A noncontributory pension plan is one where the employer makes all of the contributions to the plan; the employee makes no contributions.

Question 10

Question CPA-02086

Which of the following statements is correct regarding the scope and provisions of the Occupational Safety and Health Act (OSHA)?

1. OSHA may inspect a workplace at any time regardless of employer objection.
2. OSHA prohibits an employer from discharging an employee for revealing OSHA violations.
3. OSHA preempts state regulation of workplace safety.
4. OSHA requires employers to provide employees a workplace free from risk.

Answer 10

Explanation

Choice ‘‘b’’ is correct. OSHA contains a ‘‘whistleblower’’ protection provision.

Choice ‘‘d’’ is incorrect. OSHA does not require a risk-free work environment; that would be impossible. Rather, OSHA regulations generally try to make workplaces as safe as they reasonably can be.

Choice ‘‘a’’ is incorrect. OSHA does not allow inspection at any time, for example, inspections generally must be during normal hours of operation.

Choice ‘‘c’’ is incorrect. OSHA allows states to adopt other safety regulations.

Question 11

Question CPA-02089

Under Title VII of the 1964 Civil Rights Act, which of the following forms of discrimination is not prohibited?

1. Race.
2. Religion.
3. Sex.
4. Age.

Answer 11

Explanation

Choice ‘‘d’’ is correct. Title VII prohibits discrimination on the basis of race, religion, sex, national origin, etc., but it does not prohibit age discrimination. There is another federal statute for that.

Choice ‘‘c’’ is incorrect. Title VII prohibits discrimination in the basis of sex. Choice ‘‘a’’ is incorrect. Title VII prohibits discrimination on the basis of race. Choice ‘‘b’’ is incorrect. Title VII prohibits discrimination on the basis of religion.

Question 12

Question CPA-02091

Which of the following statements is correct under the Federal Fair Labor Standards Act?

1. All workers are required to be included within both the minimum wage provisions and the overtime provisions.
2. Some workers may be included within the minimum wage provisions but exempt from the overtime provisions.
3. Some workers may be included within the overtime provisions but exempt from the minimum wage provisions.
4. Possible exemptions from the minimum wage provisions and the overtime provisions must be determined by the union contract in effect at the time.

Answer 12

Explanation

Choice ‘‘b’’ is correct. Some workers, for example cab drivers, must be paid at least minimum wage but need not be paid overtime. These are generally described as exempt workers.

Choice ‘‘c’’ is incorrect. If workers are within the overtime provisions, they also are within the minimum wage proVisions.

Choice ‘‘a’’ is incorrect. Not all workers are subject to the minimum wage requirements. For example, farm workers need not be paid minimum wage.

Choice ‘‘d’’ is incorrect. The exemptions do not depend on a union contract.

Question 13

Question CPA-02094

Under the Federal Consolidated Budget Reconciliation Act of 1985 (COBRA), when an employee v0luntarily resigns from a job, the former employee’s group health insurance coverage that was in effect during the period of employment with the company:

1. May be retained by the former employee at the former employee’s expense for at least 18 months after leaving the company, but must be terminated for the former employee’s spouse.
2. Automatically ceases for the former employee’s spouse, but continues for the former employee for an 18- month period at the former employer’s expense.
3. May be retained for the former employee and spouse for at least 18 months after leaving the company.
4. Automatically ceases for the former employee and spouse, if the resignation occurred before normal retirement age.

Answer 13

Explanation

Choice ‘‘c’’ is correct. COBRA requires employers to provide former employees and their spouses and dependents insurance for 18 months after the employee resigns. The employer may charge the employee up to 102°/o of the cost of the insurance.

Choice ‘‘d’’ is incorrect. COBRA requires the insurance to be made available to the employee for 18 months.

Choice ‘‘b’’ is incorrect. COBRA requires the insurance to be available to the former employee’s spouse as well as the former employee.

Choice ‘‘a’’ is incorrect. COBRA requires the insurance to be available to the former employee’s spouse as well as to the former employee.

Question 14

Question CPA-02097

After serving as an active director of Lee Corp. for 20 years, Ryan was appointed an honorary director with the obligation to attend directors’ meetings with no v0ting power. In 1992, Ryan received an honorary director’s fee of

$5,000. This fee is:

1. Taxable as ‘‘Other income’’ by Ryan, not subject to any social security tax.
2. Considered to be a gift not subject to social security self-employment or income tax.
3. Reportable by Lee as employee compensation subject to social security tax.
4. Reportable by Ryan as self-employment income subject to social security self-employment tax.

Answer 14

Explanation

Choice ‘‘d’’ is correct. Directors are treated as independent contractors. Thus, their compensation is self­ employment income.

Choice ‘‘c’’ is incorrect. Only wages are taxable as employee income. A director does not receive wages from his corporation, but rather stands as an independent contractor.

Choice ‘‘a’’ is incorrect. Income derived from performing services for an employer constitutes wages, not other i• ncome.

Choice ‘‘b’’ is incorrect. Since Ryan is obligated to attend meetings to receive the $5,000, it is not a gift.

Question 15

Question CPA-02100

Which one of the following statements concerning workers’ compensation laws is generally correct?

1. Workers’ compensation awards are not reviewable by the courts.
2. Employers are strictly liable without regard to whether or not they are at fault.
3. Workers’ compensation benefits are not available if the employee is negligent.
4. The amount of damages recoverable is based on comparative negligence.

Answer 15

Explanation

Choice ‘‘b’’ is correct. Under workers’ compensation laws, employers are generally strictly liable for injuries to employees.

Choice ‘‘c’’ is incorrect. Workers’ compensation is available for injuries incurred on the job as long as they were not purposely self-inflicted.

Choice ‘‘a’’ is incorrect. Decisions of all government agencies are reviewable by the courts as a matter of due process.

Choice ‘‘d’’ is incorrect. The amount recoverable under workers’ compensation is based on the nature of the injury and has nothing to do with contributory negligence.

Question 16

Question CPA-02102

Which of the following forms of income, if in excess of the annual exempt amount, will cause a reduction in a retired person’s social security benefits?

1. Pension payments.
2. Director’s fees.
3. Closely held corporation stock dividends.
4. Annual proceeds from an annuity.

Answer 16

Explanation

Choice ‘‘b’’ is correct. Social security benefits will be reduced if a person earns income from labor beyond the exempt amount. Income for working as a director constitutes income from labor.

Choice ‘‘d’’ is incorrect. Social security benefits will be reduced if a person earns income from labor beyond the exempt amount. Proceeds from an annuity do not constitute income from labor.

Choice ‘‘a’’ is incorrect. Social security benefits will be reduced if a person earns income from labor beyond the exempt amount. Pension benefits do not constitute income from labor.

Choice ‘‘c’’ is incorrect. Social security benefits will be reduced if a person earns income from labor beyond the exempt amount. Dividends from stock do not constitute income from labor.

Question 17

Question CPA-02541

Taxes payable under the Federal Unemployment Tax Act (FUTA) are:

1. Payable by all employers regardless of the total amount of compensation paid to individual employees.
2. Deductible by the employer as a business expense for federal income tax purposes.
3. Partially deductible by the covered employee for federal income tax purposes.
4. Calculated as a fixed percentage of all compensation paid to an employee.

Answer 17

Explanation

Choice ‘‘b’’ is correct. Taxes paid under ‘‘FUTA’’ are deductible by the employer as a business expense for federal income tax purposes.

Choice ‘‘c’’ is incorrect. The employee does not get a deduction since the employee has not paid the tax. Choice ‘‘d’’ is incorrect. Only the first $7,000 of a covered employee’s wages is taxable.

Choice ‘‘a’’ is incorrect. An employer does not have to pay the tax unless the employer has a quarterly payroll of at least $1,500.

Question 18

Question CPA-02546

Under the Federal Insurance Contributions Act (FICA), all of the following are considered wages, except:

1. Bonuses.
2. Contingent fees.
3. Reimbursed travel expenses.
4. Commissions.

Answer 18

Explanation

Choice ‘‘c’’ is correct. Under FICA, wages are compensation for labor. Reimbursed travel expenses are not considered wages and are not in gross income; therefore they are not subject to FICA.

Choice ‘‘b’’ is incorrect. Under FICA, wages are compensation for labor. Thus, contingent fees would be considered as wages.

Choice ‘‘a’’ is incorrect. Under FICA, wages are compensation for labor. Thus, bonuses would be considered as wages.

Choice ‘‘d’’ is incorrect. Under FICA, wages are compensation for labor. Thus, commissions would be considered as wages.

Question 19

Question CPA-02550

Social security benefits may include all of the following, except:

1. Medicare payments.
2. Payments to disabled children.
3. Medicaid payments.
4. Payments to div0rced spouses.

Answer 19

Explanation

Choice ‘‘c’’ is correct. Social security benefits do not include Medicaid payments. Medicaid is a state run program. The federal social security system contains four major benefit programs:

1. (OASI) old age and surviv0rs insurance.
2. (DI) disability insurance.
3. (Medicare).
4. (SSI) supplemental security income.

Choices ‘‘d’’, ‘‘b’’, and ‘‘a’’ are incorrect, since social security benefits may include:

d. Payments to div0rced spouses.
b. Payments to disabled children.
a. Medicare.

Question 20

Question CPA-02554

An employer having an experience unemployment tax rate of 3.2°/o in a state having a standard unemployment tax rate of 5.4°/o may take a credit against a 6.0°/o federal unemployment tax rate of:

a. 5.4°/o b. 6.2°/o C. 3.0°/o
d. 3.2°/o

Answer 20

Explanation

Choice ‘‘a’’ is correct. The employer may take a credit against the federal unemployment tax in an equal amount to the state rate. Here the state rate of 5.4°/o will be used since it is less than the federal rate.

Question 21

Question CPA-02557

Which of the following types of income is subject to taxation under the provisions of the Federal Insurance Contributions Act (FICA)?

1. Car received as a productivity award.
2. Interest earned on municipal bonds.
3. Capital gains of $3,000.
4. Dividends of $2,500.

Answer 21

Explanation

Choice ‘‘a’’ is correct. (Wages are subject to FICA) Since a car received as a productivity award would be considered a substitute for wages/salary, the fair market value of the car would be subject to FICA taxation.

Choices ‘‘b’’, ‘‘c’’, and ‘‘d’’ are incorrect, since the following forms of income would not be subject to taxation under FICA.

1. Interest on municipal bonds
2. Capital gains
3. Dividends

Question 22

Question CPA-02562

An unemployed CPA generally would receive unemployment compensation benefits if the CPA:

1. Was fired for embezzling from a client.
2. Refused to accept a job as an accountant while receiving extended benefits.
3. Left work v0luntarily without good cause.
4. Was fired as a result of the employer’s business reversals.

Answer 22

Explanation

Choice ‘‘d’’ is correct. Unemployment compensation benefits are available to an unemployed CPA (or anyone else) who was discharged (fired) as a result of the employer’s business reversals.

Choice ‘‘b’’ is incorrect. Unemployment benefits are not available where an unemployed individual refuses to accept similar work while receiving extended benefits.

Choice ‘‘a’’ is incorrect. Unemployment benefits are not available where the unemployed CPA was fired for embezzling.

Choice ‘‘c’’ is incorrect. Unemployment benefits are not available where the unemployed CPA left work v0luntarily without good cause.

Question 23

Question CPA-02642

Workers’ Compensation laws provide for all of the following benefits, except:

1. The cost of prosthetic devices.
2. Monthly payments to surviving dependent children.
3. Burial expenses.
4. Full pay during disability.

Answer 23

Explanation

Choice ‘‘d’’ is correct. Workers’ compensation laws do not provide for ‘‘full’’ pay during a disability. With disability benefits the employee may receive a percentage of his/her wages, but not ‘‘full’’ wages.

Choice ‘‘c’’ is incorrect. Workers’ compensation laws can provide for burial expenses.

Choice ‘‘a’’ is incorrect. Workers’ compensation laws can provide for the cost of a prosthetic device.

Choice ‘‘b’’ is incorrect. Workers’ compensation laws can provide for payments to surviving dependent children.

Question 24

Question CPA-02646

An employer who fails to withhold Federal Insurance Contributions Act (FICA) taxes from covered employees’ wages, but who pays both the employer and employee shares would:

1. Have a right to be reimbursed by the employees for the employees’ share.
2. Be entitled to a refund from the IRS for the employees’ share.
3. Be allowed no federal tax deduction for any payments.
4. Owe penalties and interest for failure to collect the tax.

Answer 24

Explanation

Choice ‘‘a’’ is correct. An employer who fails to withhold FICA taxes from an employee’s wages is liable for the employee’s portion. Once the employer pays both shares to the government, he/she has the right to be reimbursed by the employee for the employee’s share.

Choice ‘‘b’’ is incorrect. Where the employer fails to withhold, the employer becomes primarily liable for the employee’s share.

Choice ‘‘c’’ is incorrect. Employers are allowed a deduction for the employer’s portion.

Choice ‘‘d’’ is incorrect. The penalties are based on the failure to pay and not on the failure to collect the tax.

Question 25

Question CPA-02648

Unemployment tax payable under the Federal Unemployment Tax Act (FUTA), is:

1. Paid to the Social Security Administration.
2. Deducted from employee wages.
3. A tax-deductible employer’s expense.
4. Payable by all employers.

Answer 25

Explanation

Choice ‘‘c’’ is correct. An employer’s payment under the Federal Unemployment Tax Act (FUTA) is a tax­ deductible employer expense.

Choice ‘‘d’’ is incorrect. An employer that does not have a quarterly payroll of at least $1,500 or does not employ at least one person one day a week for 20 weeks in a year does not have to pay.

Choice ‘‘b’’ is incorrect. The federal unemployment tax is paid by the employer and not deducted from the employee’s wages.

Choice ‘‘a’’ is incorrect. The federal unemployment tax is paid to the Internal Revenue Service and not to the Social Security Administration.

Question 26

Question CPA-02662

Workers’ Compensation Acts require an employer to:

1. Pay an employee the difference between disability payments and full salary.
2. Contribute to a federal insurance fund.
3. Provide coverage for all eligible employees.
4. Withhold employee contributions from the wages of eligible employees.

Answer 26

Explanation

Choice ‘‘c’’ is correct. Workers’ compensation laws require that employers provide coverage for all eligible employees.

Choice ‘‘d’’ is incorrect. Workers’ compensation contributions are made by the employer.

Choice ‘‘a’’ is incorrect. No such rule! Employees are paid a percentage of their wage subject to established Iimitations.

Choice ‘‘b’’ is incorrect. There is no federal insurance fund. Workers’ compensation laws are administered at the state level.

Question 27

Question CPA-02664

Under the federal Age Discrimination in Employment Act, which of the following practices is prohibited?

1. Unintentional age discrimination.
2. Mandatory retirement of any employee.
3. Termination of employees as part of a rational business decision.
4. Termination of employees between the ages of 65 and 70 for cause.

Answer 27

Explanation

Choice ‘‘a’’ is correct. The age discrimination in employment act (‘‘ADEA’’) prohibits age discrimination, whether intentional or unintentional.

Choice ‘‘d’’ is incorrect, because the ADEA does not prohibit termination for cause at any age.

Choice ‘‘b’’ is incorrect, because the ADEA does not prohibit mandatory retirement for employees over 40 if, for example, there is a bona fide occupational qualification.

Choice ‘‘c’’ is incorrect, because the ADEA does not prohibit termination of employees as part of a rational business decision.

Question 28

Question CPA-04991

Steve works as a countertop installer for Mica Distributors, Inc. While cutting the countertop with an electric circular saw, Steve cut his hand. The wound was deep and required stitches. Steve will be compensated under state workers’ compensation laws only if:

1. Steve successfully sues Mica Distributors.
2. Steve’s injury was accidental and occurred on the job or in the course of employment.
3. Steve does not have private health or disability insurance.
4. Steve is completely disabled.

Answer 28

Explanation

Choice ‘‘b’’ is correct. Steve will not need to sue his employer to collect worker’s compensation. Employers are strictly liable regardless of fault for injuries incurred by employees while in the performance of their jobs.

Choice ‘‘c’’ is incorrect. Steve is eligible for workers compensation regardless of whether he has private health or disability insurance.

Choice ‘‘d’’ is incorrect. Steve does not need to be completely disabled to collect workers compensation.

Choice ‘‘a’’ is incorrect. Steve will not need to sue his employer to collect worker’s compensation. Employers are strictly liable.

Question 29

Question CPA-05264

Under the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), which of the following statements is(are) correct regarding employee rights?

1. Employers are required to establish either a contributory or noncontributory employee pension plan.
2. Employers are required to include employees as pension-plan managers.
3. Both I and II.
4. I only.

C. II only.

d. Neither I nor II.

Answer 29

Explanation

Choice ‘‘d’’ is correct. The Employment Retirement Income Security Act (ERISA) does not require employers to have retirement plans or require contributions to existing retirement plans. ERISA does not mandate that employers are required to include employees as pension-plan managers. ERISA does establish standards for funding and investing and imposes fiduciary duties on pension fund managers.

Only choice ‘‘d’’ reflects that employers are not required to establish a pension plan and employees do not need to be included as pension-plan managers.

Question 30

Question CPA-06526

Worker’s compensation benefits are available to which of the following parties?

1. All agents injured while commuting to and from VI/Ork.
2. Only those employees injured while working within the scope of employment.
3. All agents injured while using the employer’s automobile for personal use.
4. Only those employees injured while working on workplace premises.

Answer 30

Explanation

Choice ‘‘b’’ is correct. Worker’s compensation benefits are available if the employee is injured within the scope of employment.

Choice ‘‘d’’ is incorrect. The injury need not occur on workplace premises; it need only occur within the scope of employment. Thus, if an employee is injured off-site but while working for an employer, the employee is covered.

Choice ‘‘a’’ is incorrect. This choice is wrong for t\/\/0 reasons: worker’s compensation covers only employees (‘‘agent’’ is broader) and, in most cases, commuting to and from work is not within the scope of employment.

Choice ‘‘c’’ is incorrect. This choice also is wrong for two reasons: again, not all agents are employees and so not all agents are covered, and use of one’s automobile for personal purposes is not within the scope of employment.

Question 31

Question CPA-01919

Under the Federal Insurance Contributions Act (FICA), which of the following acts will cause an employer to be liable for penalties?

Answer 31

Explanation

Choice ‘‘b’’ is correct. Failure to supply taxpayer ID numbers and failure to make timely FICA deposits can both result in penalties.

Question 32

Question CPA-01940

Which of the following claims is (are) generally covered under workers’ compensation statutes?

Answer 32

Explanation

Choice ‘‘c’’ is correct. Workers’ compensation covers both occupational diseases and aggravations of preexisting diseases.

Question 33

Question CPA-01943

Under the Age Discrimination in Employment Act, which of the following remedies is(are) available to a covered employee?

Answer 33

Explanation

Choice ‘‘a’’ is correct. The Age Discrimination Act provides for injunctions and back pay, but not early retirement.

Question 34

Question CPA-01944

Which of the following Acts prohibit(s) an employer from discriminating among employees based on sex?

Answer 34

Explanation

Choice ‘‘d’’ is correct. The Equal Pay Act prohibits discrimination in compensation based on sex. Title VII prohibits discrimination in the hiring, firing, promotion, compensation, etc., based on many traits, including sex.

Question 35

Question CPA-01947

Under the Fair Labor Standards Act, which of the following pay bases may be used to pay covered, nonexempt employees who earn, on average, the minimum hourly wage?

Answer 35

Explanation

Choice ‘‘c’’ is correct. Hourly, weekly, and monthly pay bases are proper for a nonexempt employee as long as the employee makes at least minimum wage.

Question 36

Question CPA-02008

Under the Employee Retirement Income Security Act of 1974 (ERISA), which of the following areas of private employer pension plans is(are) regulated?

Answer 36

Explanation

Choice ‘‘d’’ is correct. ERISA regulates both the vesting of pension plans and the funding of the plans (at least to the extent that they are defined contribution plans).

Question 37

Question CPA-02010

Which of the following employee benefits is (are) exempt from the provisions of the National Labor Relations Act?

Answer 37

Explanation

Choice ‘‘b’’ is correct. Neither sick pay nor vacation pay are exempt from the National Labor Relations Act.

Question 38

Question CPA-02028

Which of the following payments are deducted from an employee’s salary?

Answer 38

Explanation

Choice ‘‘d’’ is correct. Unemployment compensation insurance and \/1/0rkers’ compensation insurance both are paid by the employer. They are not deducted from the employee’s wages.

Question 39

Question CPA-02037

Under the provisions of the Americans With Disabilities Act of 1990, in which of the following areas is a disabled person protected from discrimination?

Answer 39

Explanation

Choice ‘‘c’’ is correct. Title II of the ADA [42 U.S.C. §12101 et seq.] prohibits discrimination by public transportation while Title Ill prohibits discrimination by privately operated public accommodations.

Question 40

Question CPA-02078

Under the Federal Fair Labor Standards Act, which of the following would be regulated?

Answer 40

Explanation

Choice ‘‘c’’ is correct. The FLSA contains provisions on the minimum wage, overtime, and workweek hours.

Question 41

Question CPA-02133

Kroll, an employee of Acom, Inc., was injured in the course of employment while operating a forklift manufactured and sold to Acorn by Trell Corp. The forklift was defectively designed by Trell. Under the state’s mandatory workers’ compensation statute, Kroll will be successful in:

Answer 41

Explanation

Choice ‘‘d’’ is correct. Workers’ compensation statutes are intended to provide strict liability insurance for injuries incurred while on the job, so Kroll will be able to recover for the injuries incurred because of the design defect, even though his employer had nothing to do with the accident. However, the trade off is that the employee cannot bring a negligence action against the employer.