Compensation and Benefits

Question 1

traditional IRA

Answer 1

Contributions to these individual retirement plans are made with taxes being paid at the outset. Funds are taxed when money is withdrawn, and an additional 10 percent tax penalty is applied if contributors withdraw funds before they are eligible.

Question 2

skill pay

Answer 2

Pay that rewards employees for acquiring new skills.

Question 3

Medicare

Answer 3

Established by the Social Security Act in 1965, this program provides certain citizens with health care, regardless of their income.

Question 4

family leave

Answer 4

Up to 12 weeks of unpaid time off to care for family members; federal law requires employers to offer this benefit.

Question 5

compa-ratio

Answer 5

A measure of how an individual employee’s pay relates to the pay ranges established by the organization and the larger market. Defined as the employee’s salary, divided by the midpoint of the salary range for that position.

Question 6

Uniformed Services Employment and Reemployment Rights Act

Answer 6

This act was enacted to protect the rights of military reservists who are called to duty in the armed forces.

Question 7

on-call pay

Answer 7

Additional money paid to a worker while he or she is “on call,” i.e., not actively working but available to be called into work if needed.

Question 8

differential pay

Answer 8

Extra pay, also known as premium pay, given to a worker to compensate for the danger, inconvenience, or added cost of a specific job or assignment.

Question 9

Federal-State Unemployment Insurance Program

Answer 9

This act is an extension of the Social Security Act, and it provides benefits to employees who have lost their employment for certain reasons.

Question 10

Walsh-Healey Public Contracts Act

Answer 10

This act protects employees working under government contracts from working for substandard wages. Many of these provisions were later incorporated into the Fair Labor Standards Act, which covers all private-sector employees–not just those working for companies with federal contracts.

Question 11

merit pay

Answer 11

Pay based on exceeding objectives or performance standards.

Question 12

workers’ compensation

Answer 12

A type of insurance that is allotted to employees who are injured at or get an illness from their workplace.

Question 13

job evaluation

Answer 13

A process that categorizes all jobs at a company according to the level of responsibility and skills required.

Question 14

internal equity

Answer 14

Ensuring that the pay levels within an organization correspond to the level of responsibility and skills required for the job.

Question 15

Mental Health Parity Act

Answer 15

This act required that insurers provide the same limits for mental health services for employees that they provide for other medical benefits.

Question 16

Consolidated Omnibus Budget Reconciliation Act

Answer 16

This act requires employers to extend a health care coverage purchase option after an employee is terminated or resigns.

Question 17

Economic Growth and Tax Relief Reconciliation Act

Answer 17

This act permits employees over the age of 50 to make greater contributions to 401(k) plans and to make catch-up contributions.

Question 18

benefits

Answer 18

Various non-wage forms of compensation provided to employees in addition to their normal wages or salaries.

Question 19

Portal-to-Portal Act

Answer 19

This act determined that commute time is not compensable, but that employers must compensate workers for performing job-related tasks outside of work hours or during lunch breaks.

Question 20

stock options

Answer 20

The right to purchase shares in a company for a set price at some point in the future.

Question 21

minimum wage

Answer 21

The lowest hourly rate of pay that an employer can pay to an employee who is covered by state or federal wage-and-hour laws.

Question 22

Employee Retirement Income Security Act

Answer 22

A federal law that establishes minimum standards for retirement and health plans.

Question 23

reporting pay

Answer 23

A minimum payment, required in some states but not by federal law, made to compensate workers who report for work but are not asked to put in a full day on the job.

Question 24

overtime

Answer 24

Pay at 1.5 times the base rate that must be paid to hourly workers who work more than 40 hours in one week.

Question 25

compensation

Answer 25

Employee or management wages and other financial benefits earned from labor.

Question 26

Consumer Credit Protection Act

Answer 26

This act established that employers may be required to withhold money from the paychecks of employees with certain financial debts, but also protects employees from termination for those debts.

Question 27

Qualified Domestic Relations Orders

Answer 27

Legal orders that enforce alternative payee arrangements, which are directed by an employee.

Question 28

Older Worker Benefit Protection Act

Answer 28

This act prohibited employers from discriminating against older employees when it comes to benefit plans.

Question 29

Pension Protection Act

Answer 29

This act protects employees when they are entitled to pension plans, but those plans do not have the funds necessary to provide the promised benefits.

Question 30

service award

Answer 30

Recognition for an employee's length of service.

Question 31

hardship distribution or withdrawal

Answer 31

Early withdrawals from a retirement account that satisfy an immediate and heavy financial need.

Question 32

prevailing wage

Answer 32

The usual wage, benefits, and overtime that are paid in the largest city in each county to the majority of workers on a public works project.

Question 32

base rate

Answer 32

Wages or salary before overtime pay, bonuses, or other incentive pay is considered.

Question 33

pay for performance

Answer 33

Any compensation system that links pay and performance.

Question 34

simplified employee pension plan

Answer 34

A retirement plan that involves employers setting aside money in retirement accounts for employees.

Question 34

pay grades

Answer 34

Bands of minimum and maximum salaries offered for jobs valued at similar rates.

Question 35

pay ranges

Answer 35

A range of potential compensation amounts for employees who hold a specified position.

Question 36

catch-up contributions

Answer 36

Additional contributions made by people aged 50 or older to their retirement accounts.

Question 37

wage compression

Answer 37

The inequity that arises when new employees demand, and receive, higher wages than current employees who are performing the same job.

Question 38

commissions

Answer 38

Earnings based on the number of total sales.

Question 38

maternity leave

Answer 38

Paid leave given to a female employee for the birth of her child.

Question 39

nonexempt employees

Answer 39

Employees who are not exempt from certain provisions of the Fair Labor Standards Act, most notably its requirements involving the minimum wage and overtime pay. Most (though not all) workers who are paid by the hour are nonexempt employees.

Question 40

Family and Medical Leave Act

Answer 40

Federal law that allows most employees up to 12 weeks of unpaid leave for family or medical reasons each year.

Question 40

Old Age, Survivors, and Disability Insurance Program

Answer 40

This act was established as part of the Social Security Act. It offers benefits to employees who retire or become unable to work as well as eligible surviving dependents if the employee passes away.

Question 40

actual deferral percentage test

Answer 40

These tests ensure highly compensated employees don't benefit unduly from 401(k) plans at the expense of other employees.

Question 40

401(k)

Answer 40

Employer-sponsored retirement plan that allows employees to save for retirement by contributing a percentage of their paycheck on a pre-tax basis; earnings accrue on tax-deferred basis.

Question 40

broadbanding

Answer 40

The use of a job grading structure with extremely wide salary bands.

Question 41

Roth IRA

Answer 41

Contributions to these individual retirement plans are made after taxes have been paid, and therefore when those funds are withdrawn, they are not subject to federal income tax.

Question 42

profit sharing

Answer 42

System in which employees receive a share of the net profits of the business.

Question 43

managed care

Answer 43

A system designed to control health care costs by restricting patients' access to certain doctors and hospitals, limiting treatment options, and using a management company to hold down costs.

Question 44

tenure

Answer 44

The length of time an employee has been at a company.

Question 45

co-payment

Answer 45

The amount a patient must pay for a medical visit or prescription, in addition to whatever an insurer pays.

Question 46

shift pay

Answer 46

Additional pay given to workers to compensate them for working on less desirable shifts, i.e., the second or third shift.

Question 47

457(b)

Answer 47

Retirement plan offered by state or local governments and some non-profit organizations; contributions are made on a pre-tax basis and earnings are tax-deferred.

Question 48

Fair Labor Standards Act

Answer 48

Federal law that established minimum wage, maximum weekly hours and overtime pay requirements and prohibited the labor of children less than 16 years of age.

Question 49

group incentive pay

Answer 49

Pay rewarding a group for exceeding a collective goal.

Question 50

external equity

Answer 50

The comparison of the pay levels of a company to other companies to ensure that the levels are comparable.

Question 51

Retirement Equity Act

Answer 51

This act reduced the existing age limits restricting participation in pension plans, provided more protections for survivors of employees entitled to pensions, and restricted conditions that could be placed on survivor plans.

Question 52

Patient Protection and Affordable Care Act

Answer 52

This act is a health care reform passed in 2010. It aims to ensure all Americans have access to affordable health care, and it penalizes large companies that do not offer "minimal essential coverage."

Question 53

exempt employees

Answer 53

Employees who are exempt from certain provisions of the Fair Labor Standards Act, most notably its requirements involving the minimum wage and overtime pay. There are many classifications of exempt employees, including professionals, executives, administrators, and outside salespeople.

Question 54

job pricing

Answer 54

The process of assigning value to particular employment positions.

Question 55

call-back pay

Answer 55

Extra money, above the base rate, paid to workers who are called back to work after their regular hours are over and they have left the workplace.

Question 56

premium

Answer 56

The amount paid to an insurance company for an insurance policy or health care coverage.

Question 57

hazard pay

Answer 57

Additional money paid to compensate employees who are assigned to work in a dangerous location or in hazardous circumstances.

Question 58

incentive pay

Answer 58

Pay in addition to the base salary, which is intended to encourage performance.

Question 58

geographic pay

Answer 58

Extra money paid to employees in one location to account for the higher cost of labor, or the higher cost of living, relative to other locations where the company has employees.

Question 59

Davis-Bacon Act

Answer 59

This act was the first federal legislation to mandate that laborers and mechanics be paid the prevailing wage on public works projects.

Question 60

competitive wages

Answer 60

Pay that is comparable to what is earned by other workers in the same geographic area who are doing the same type of work.

Question 61

total rewards

Answer 61

The sum of all compensation and benefits paid to an employee, including pay; benefits; incentives; and nonmonetary compensation such as professional development, career opportunities, camaraderie, personal satisfaction, flextime, and telecommuting.