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FPC Exam Questions And Accurate Answers
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FPC Exam Questions And Accurate Answerspayroll - ANSWER The process followed to pay employees correctly and timely
Employee Federal Withholding Taxes - ANSWER Federal income tax, social security tax,
medicare
Independent Contractor - ANSWER any person who agrees to perform a service for a
fee and who is not subject to the control of those for whom the service is performed
Independent Contractors - Individuals hired on temporary contracts and are not
considered permanent workforce of the organization
Common Law Test - A test for establishing employments status that focuses on the right
of the hiring principal to control the manner and means by which the worker pursues the
work result to be accomplished
Common Law Test - Employee - ANSWER - Must obey the employer's directions as to
when, where and how much to perform the work
- Works for the employer only
- Employer hired the employee
- Can be discharged or quit the job without legal liability
- Has a continuing relationship with the employer
- The work assigned must be done by worker
- Performs the services in the name of the business
- Received a salary, expense reimbursement, fringe benefits through company
- Job provided tools, equipment, training and materials
-If an outside sales person - the company provides leads, sets terms, assigns territory,
,and controls the sales process
Common Law Test - Independent Contractor - ANSWER -Sets own hours and determines
their own work sequence
- Can work for many employers and services can be offered directly to public
- Is his own employer
- Determines the ways the contract relationship may be terminated
Contracts per job
- Able to hire helpers
- Sell under their name
- Paid per job
- Provides own tools, supplies, and training
- Responsible for one's own sales and credit terms
Reasonable Basis Test - ANSWER Exception to the Common Law Test
Employers can classify a worker as an independent contractor if the worker meets the
following requirement:
- if the employer files a 1099 on behalf of the worker
- there is a longstanding and recognized practice in a significant segment of the
employer's industry of treating similar workers as independent contractors
Judicial precedent of treating workers in similar circumstances as independent
contractors
IRS has ruled in a "published ruling" that the workers are independent contractors
Received a private ruling from the IRS-a letter-saying the workers are independent
contractors
Have had a past IRS employment audit that did not disallow the workers treatment as an
independent contractor
-Have received an opinion from an attorney or CPA indicating worker is independent
contractor
,Immigration Reform and Control Act of 1986 - ANSWER Federal statute that requires all
employers to verify and document a job applicant's eligibility for employment in the
United States
PENALTIES:
$559-$4,473 first offense for each unauthorized worker employed
$4,473-$11,181 for second offense
$6,709-$22,363 for more than two offenses
Employment eligibility verification - ANSWER - Employer is responsible
- I-9 form should be completed within 3 days of the employees start date
- Employers must confirm employees work eligibility through the Department of
Homeland Security E-Verify system
Social Security Verification - ANSWER - IRS regulations offer that all employees provide
their employer with their social security card upon request
- SSA (social security administration) recommends:
- employers verify employees name and SSN on the W4 form as a part of the hiring
process
Form SS-5 - ANSWER Application for a SS Card
New Hire Reporting - ANSWER - Can be done using form W4
- Employer must provide:
- Employees name, address, SSN, and date that employment began
- Employers name, address, and FEIN
, - New hire reporting must be completed within 20 days
-If an employee breaks employment for more than 60 days, upon return they must go
through new hire reporting again
- New hire reporting does not apply to independent contractors
Fair Labor Standards Act of 1938 (FLSA) - ANSWER A federal law that
- guarantees employees minimum wage
- Requires employers to pay overtime premiums
- Limits when minors can work
- Provides equal pay protection
Exempt employees - ANSWER Employees not covered by the overtime provisions of the
Fair Labor Standards Act
Ex. executives (direct the work of at least 2 full time EE, have hiring/firing power,
discretionary powers, and make at least $23,660/yr.), administrative (perform office
work or work in school system support and exercise independent judgement in
decisions), professionals, and outside salespeople-must work away from company's
main office, no min salary
A weekly minimum salary must be met - $455/wk
Non-Exempt Employees - ANSWER employees covered by the FLSA requirements for
minimum wage and overtime pay
Ex.
Federal Minimum Wage - ANSWER $7.25/hour
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