REG 20 - Other Federal Laws and Regulation 1 - Anti-Discrimination/Employee welfare/FUTA Flashcards Preview

REG - CPA Excel > REG 20 - Other Federal Laws and Regulation 1 - Anti-Discrimination/Employee welfare/FUTA > Flashcards

Flashcards in REG 20 - Other Federal Laws and Regulation 1 - Anti-Discrimination/Employee welfare/FUTA Deck (30)

Under Title VII of the 1964 Civil Rights Act, which of the following forms of discrimination is not prohibited?
A. Gender.
B. Age.
C. Race.
D. Religion.

B. Title VII protects against discrimination in hiring, firing, promotion, and compensation on the basis of race, religion, gender, and national origin. Other statutes protect other groups, but this is the extent of the protection under Title VII itself. The Age Discrimination in Employment Act protects older workers in much the same way, for example.


Brock is terminated for (a) smoking pot in front of employees; (b) lack of attention to job duties; (c) an open affair with his secretary; and (d) low office morale. He wishes to sue his employer. Which of the following is true?
A. Brock will probably lose.
B. Brock would have a plausible case if he could prove that his race was also a motivating factor in his termination.
C. A and B.
D. None of the above.

C. Both A and B are accurate.

(A) it is perfectly fine to terminate employees for cause, A is a good answer.
(B) employees with "mixed motive" cases can win if they show that an impermissible motive was a "motivating factor" in an adverse employment action.


Under the Federal Age Discrimination in Employment Act, which of the following practices is prohibited?
A. Termination of employees between the ages of 65 and 70 for cause.
B. Mandatory retirement of any employee.
C. Unintentional age discrimination.
D. Termination of employees as part of a rational business decision.

C. Even unintentional age discrimination is remedied by the ADEA.


Mary's supervisor tells her one day that she has the "sleekest ass" in the company. This highly offends Mary, and she sues her employer for hostile-environment sexual harassment. Which of the following is true?
A. Mary has a strong case.
B. Mary will probably lose, because she has not established an intimidating, hostile, or offensive working environment.
C. If Mary's supervisor had been female, no sexual-harassment claim would be possible.
D. None of the above.

B. It would be rare that a single comment, no matter how thoughtless, rude, or sexist, could produce an actionable "hostile environment."


A large corporation fires Sally for being an alcoholic and Ted for showing up drunk at work. Both file ADA claims. Who is likely to win?
A. Sally.
B. Ted.
C. Both.
D. Neither.

A. The condition of being an alcoholic is protected by the ADA.


T/F: Sue went to work for a Big Six firm. She was a competent accountant, but she was small and slender and could easily pass for 15 or 16 years old. The firm let Sue go because it felt that its clients did not take her seriously. Sue filed an ADEA suit against her firm. She will probably win.

Age discrimination does not apply to the too young... only aimed at the too old.


After serving as an active director of Lee Corp. for 20 years, Ryan is appointed an honorary director, with the obligation to attend directors' meetings, but with no voting power.

In 2005, Ryan receives an honorary director's fee of $5,000. This fee is
A. Reportable by Lee as employee compensation subject to Social Security tax.
B. Reportable by Ryan as self-employment income subject to Social Security self-employment tax.
C. Taxable as "other income" of Ryan, not subject to any Social Security tax.
D. The $5,000 is considered to be a gift not subject to Social Security self-employment or income tax.

B. Because he has no voting power, Ryan is not an "employee" of the corporation, and the $5,000 is not employee compensation. He is receiving the money for doing something, however, because he is obligated to attend the meetings.
This obligation makes his $5,000 income, and not a gift. Because he is not an employee of the corporation, this amount is self-employment income, which is subject to both self-employment tax and Social Security tax.


Assume that the maximum wage base for FICA is $100,000. Jill earns $50,000 while working for MaximumEd Corporation. Jill also has her own business on the side, making $100,000 net. Upon what amount must Jill pay taxes under the Self-Employment Contributions Act?
A. $150,000.
B. $100,000.
C. $50,000.
D. None of the above.

C. The maximum wage base for FICA is reduced by the amount Jill paid through other means. She and MaximumEd both paid their share on the $50,000 that she made working for MaximumEd. Therefore, Jill should have to pay taxes under SECA on only $50,000, so this is the correct answer.


Under the Federal Insurance Contributions Act (FICA), all of the following are considered wages, except
A. Contingent fees.
B. Reimbursed travel expenses.
C. Bonuses.
D. Commissions.

B. Anything that is compensation is classified as wages under FICA. Reimbursed travel expenses are not compensation, however. They are merely the paying back of out-of-pocket expenses, so that an employee may break even.


Which of the following types of income is subject to taxation under the provisions of the Federal Insurance Contributions Act (FICA)?
A. Interest earned on municipal bonds.
B. Capital gains of $3,000.
C. A vehicle received as a productivity award.
D. Dividends of $2,500.

C. Social security is set up to help retirees with their loss of earned income. Generally, to be subject to FICA taxes, the income must be earned in the course of employment. This does not mean that only traditional wages are taxed. A car earned as a bonus is still very much a benefit realized in the course of employment, and so the value of the car will be the basis for FICA taxes.


Melody is a CPA for Tangier Co., which has just taken bankruptcy. Melody knows that Tangier has not met all its federal payroll tax obligations and is worried about her personal liability. Which of the following are factors that courts consider is determining whether someone is a "responsible person" under Sec. 6672?
A. Is Melody an officer or director?
B. Is Melody a CPA?
C. Does Melody have a graduate degree?
D. A and B.

A. Of the factors listed in this question, only this one is considered by the courts in determining whether one is a "responsible person."


Assume that the maximum wage base for FICA is $100,000 and that the tax rate is 6.20% of Social Security and 1.45% for Medicare. Employers and employees share the tax equally, meaning that both pay 7.65%. Which of the following is true for Joe, a self-employed person?
A. Joe must pay 15.3% (7.65% in his role as employer and 7.65% in his role as employee) under the Self-Employment Contributions Act of 1954.
B. In calculating his "net earnings from self-employment" that will be subject to the tax, Joe may subtract 7.65% of his gross earnings to account for the fact that employees do not get taxed on their employers' contribution to the second half of FICA, so self-employed persons should not be taxed on that half of their contribution either.
C. A and B.
D. d. None of the above.

C. Both A and B are accurate


T/F: In order to "willfully" fail to pay taxes, the individual had to intend to defraud the government.

In order to willfully fail to pay payroll taxes, an individual had to be aware of the obligation he or she owed to pay the tax.


Taxes payable under the Federal Unemployment Tax Act (FUTA) are
A. Deductible by the employer as a business expense for federal income-tax purposes.
B. Payable by employers for all employees.
C. Withheld from the wages of all covered employees.
D. Calculated as a fixed percentage of all compensation paid to an employee.

A. Unemployment taxes are paid entirely by an employer. There are no deductions from employees' pay, as is the case with Social Security taxes. This expense is a deduction for employers on their federal income-tax returns.

An employer pays for all obligations under FUTA and the employees do not contribute out of their paychecks. These taxes are fully deductible by the employer when the employer calculates federal income taxes.


T/F: Suzy went to work for ABC Corp. The following Monday, ABC was bought in a major corporate takeover and its new owner immediately laid off 1,000 ABC employees, including Suzy. Suzy's firing will probably be cushioned by her ability to collect unemployment compensation.

Because ABC Corp was bought out and in the takeover, Suzy lost her job, it would be considered as if she weren't hired by the new company/new job. Not a lay off that would be eligible for unemployment.

If she had been laid off prior to the takeover, she would be eligible for unemployment.


T/F: Sam was hired by Scally's Pizza Co. as a delivery driver. Sam is the worst delivery driver in the history of the company. He is always late and frequently has accidents. Scally keeps Sam around for a couple of years, but ultimately he costs the company so much money that he must be fired for incompetence. Given the grounds for his termination, Sam is not eligible for unemployment compensation.

Because Sam's employment was terminated involuntarily, he would be eligible for unemployment until he found another suitable job.


Which of the following statements is correct under the Federal Fair Labor Standards Act?
A. Some workers may be included within the minimum-wage provisions, but exempt from the overtime provisions.
B. Some workers may be included within the overtime provisions, but exempt from the minimum-wage provisions.
C. All workers are required to be included within both the minimum-wage provisions and the overtime provisions.
D. Possible exemptions from the minimum-wage provisions and the overtime provisions must be determined by the union contract in effect at the time.

A. Nearly everyone is covered by the minimum-wage provision. However, some of these covered workers may be exempt from the general requirement that employers pay overtime to employees who work over 40 hours per week.


T/F: Sally is paid not by the hour, but by the week. In one particular week, she was required by her employer to work 60 hours. Because she is not paid by the hour, Sally is not entitled to overtime compensation.

Sally has worked more than 40 hours in the week period and therefore is entitled to overtime compensation.


T/F: University College State AM Tech (UCSAMT) adopted a mandatory internship program for its business major so that they could have a "real life" experience in the working world before graduation. Local employer ABC Co. fired all its information systems staff and replaced them with unpaid interns from UCSAMT. ABC is probably in violation of the minimum wage rules if it does not pay the interns at least $7.25/hour.

Because the interns are displacing regular workers, they must be paid at least minimum wage.


T/F: ABC Co. pays its long shore workers by their productivity. Because Ann is not as strong as the men she works with, she typically loads only 80% as much cargo, and consequently, is paid only 80% as much. ABC's treatment of Ann violates the FLSA.

The variance in pay is due to the quality of the work and is allowed under FLSA.


T/F: ABC Timber Co. hires strapping 16-year-old Sam, star of his high school football and wrestling teams, as a logger. ABC has violated the FLSA.

Excluding those under 18 years of age from certain occupations designated as "hazardous," including mining, logging, and excavation work.


Which of the following are features of ERISA?
A. It broadly pre-empts state regulation of pension funds.
B. It applies to pension benefit plans, but not employee welfare plans.
C. It permits discrimination against lower-level employees who make less money and, therefore, have less need for pension protection.
D. All of the above.

A. ERISA does broadly pre-empt state regulation, replacing it with comprehensive federal regulation.


Which of the following are ERISA requirements?
A. Fiduciaries must invest funds in accordance with the "prudent person" standard.
B. Church benefit plans are excluded from coverage.
C. Employers are required to set up pension plans.
D. A and B.

D. Both A and B are correct.


CPA Edna has been asked to do some work with a client company's pension fund. Edna is concerned about liability and has heard that ERISA has particularly high standards for plan "fiduciaries." What helpful advice can she be given about who might be a "fiduciary?"
A. Anyone named in a benefit plan as a "fiduciary."
B. Anyone who exercises discretionary management of the plan.
C. Anyone who exercises control over the management of the plan.
D. All of the above.



Which of the following are not features of ERISA?
A. ERISA regulates defined-contribution plans and defined-benefit plans.
B. ERISA provides for partial vesting.
C. ERISA set up the PBGC.
D. ERISA applies to government pension plans.

D. ...NOT... This answer is correct, because coverage of government pension plans is not a feature or ERISA.


Jill would like to be able to take leave under the FMLA, because her mother has developed Alzheimer's and Jill needs to care for her mother personally as she attempts to arrange for more permanent and professional care. Which of the following is true?
A. This is not a situation to which the FMLA applies.
B. Jill will be eligible for FMLA leave if she has worked for her employer "for at least 12 months and for at least 1,250 hours during the previous 12 months."
C. Jill's employer must abide by the FMLA if it has at least 25 employees.
D. All of the above.

B. Not all employees qualify for FMLA benefits, but Jill does, as do other employees who meet the standards set out in this answer.


Tan has just become HR director of a regional manufacturer with 127 employees at its plant site in Kansas City. He does some research on FMLA. What is he likely to discover?
A. His company is too small to have obligations under the FMLA.
B. Employees must request FMLA leave in order to be entitled to it.
C. It is his responsibility as HR director to offer FMLA benefits to eligible employees.
D. B and C.

B. The FMLA puts the onus on employees to request FMLA leave, rather than upon the employer to offer it.


T/F: The FMLA provides paid leave for qualified employees of large companies who, among other things, have a baby.

It is not a requirement for the leave to be paid.


T/F: Bill owned his own accounting firm. He had a receptionist and three clerical helpers. One of the helpers wanted to take six weeks' personal leave to care for a sick parent.

Under FMLA she may do so.

The employee must meet the eligibility requirements to be entitled to the FMLA 12 weeks of unpaid leave.
To be eligible an employee must've worked for employer for at least 12 months; and at least 1,250 hours during the previous 12 months.


T/F: Sally was hired by ABD Co. She didn't know it at the time, but she was pregnant when hired. When Sally had her baby, she wanted to take unpaid leave under the FMLA.

If ABD has over 50 employees, Sally is entitled to FMLA benefits.

The employee must meet the eligibility requirements to be entitled to the FMLA 12 weeks of unpaid leave.
To be eligible an employee must've worked for employer for at least 12 months; and at least 1,250 hours during the previous 12 months.

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