Topic 1, Volume A
Your company is a government contractor with a current project of $250,000. As the Senior HR
Professional you've been asked how the Walsh Healy Public Contracts Act will affect your
organization. What is the Walsh Healy Public Contracts Act?
A.
This act requires government contractors with contracts over $100,000 to pay their employees the
prevailing wage for their local areas as established by the Secretary of Labor.
B.
This act requires government contractors in states that have minimum wages set higher than
federal minimum wage act to abide by the state minimum wage requirements.
C.
This act requires government contractors in states that have minimum wages set higher than
federal minimum wage act to abide by the state minimum wage requirements unless the workers
do not live in the state where the contracted work is being performed.
D.
This act requires government contractors with contracts over $10,000 to pay their employees the
prevailing wage for their local areas as established by the Secretary of Labor.
This act requires government contractors with contracts over $10,000 to pay their employees the
prevailing wage for their local areas as established by the Secretary of Labor.
Answer option D is correct.
The Walsh Healy Public Contracts Act requires government contractors with contracts of more
than $10,000 to pay their employees the wage of the local areas as established by the Secretary
of Labor.
Answer option A is incorrect. This statement is close to accurate, but the contract amount isn't
$100,000, it is only $10,000.
Answer option B is incorrect. This statement is totally false and incorrect. The Walsh Healy Public
Contracts Act does not address the Fair Labor Standards Act for minimum payment.
Answer option C is incorrect. This statement is totally false and incorrect. The Walsh Healy Public
Contracts Act does not address the Fair Labor Standards Act for minimum payment.
Reference: Professional in Human Resources Certification Study Guide, Sybex, ISBN: 978-0-470-
43096-5. Chapter Six: Total Rewards. Official PHR and SPHR Certification Guide, HR Certification
Institute, ISBN: 978-1-586-44149-4, Section III, The US Body of Knowledge.
Chapter: Compensation and Benefits
Objective: Total Rewards Defined
Gina is a receptionist for her company and she is a non-exempt employee. She works between
the hours of 8AM and 5PM. During the day she is required to be at the front desk at all times,
except for small breaks to use the restroom. Gina is often required by her company to remain at
the desk for her lunch. When Gina has to eat her lunch at the front desk is she to be compensated
for this time or not?
A.
No, because she is non-exempt
B.
No, because she is eating lunch
C.
Yes, because she is non-exempt
D.
Yes, because she is required to be at the desk
Yes, because she is required to be at the desk
Answer option D is correct.
Under the Fair Labor Standards Act, rest periods and meal periods are not required but when they
are provided, the time periods are subject to its requirements. Meal periods of 30 minutes or
longer are not compensable unless the employee is required to work during the meal.
Answer option A is incorrect. The non-exempt status does not affect the payment of the
requirements to work through lunch.
Answer option B is incorrect. Gina may be eating lunch, but she is required to stay at the front
desk during her meal.
Answer option C is incorrect. The non-exempt status does not affect the payment of the
requirements to work through lunch.
Reference: Professional in Human Resources Certification Study Guide, Sybex, ISBN: 978-0-470-
43096-5. Chapter Six: Total Rewards. Official PHR and SPHR Certification Guide, HR Certification
Institute, ISBN: 978-1-586-44149-4, Section III, The US Body of Knowledge.
Chapter: Compensation and Benefits
Objective: Total Rewards Defined
Your company would like to hire KJ, who is 17, for a summer job. How late can KJ work according
to the Fair Labor Standards Act during the summer months?
A.
KJ can work until 7 PM during the summer.
B.
KJ can work until 9 PM during the summer.
C.
KJ can work until 6 PM during the summer.
D.
KJ can work until 8 PM during the summer
KJ can work until 9 PM during the summer.
Answer option B is correct.
KJ can work between the hours of 7 AM and 9 PM during the months of June 1 and Labor Day. At
all other times of the year, KJ can only work between 7 AM and 7 PM.
Answer option A is incorrect. The 7 PM rule is only in effect after Labor Day and before June 1.
Answer option C is incorrect. 6 PM is not correct.
Answer option D is incorrect. 8 PM is not correct, as KJ may work until 9 PM.
Reference: Professional in Human Resources Certification Study Guide, Sybex, ISBN: 978-0-470-
43096-5. Chapter Six: Total Rewards. Official PHR and SPHR Certification Guide, HR Certification
Institute, ISBN: 978-1-586-44149-4, Section III, The US Body of Knowledge.
Chapter: Compensation and Benefits
Objective: Total Rewards Defined
The Hay System was developed in 1934 by Edward Hay and evaluates job using three factors.
Which of the following factors is NOT one of the three elements of job evaluation of the Hay
System?
A.
Knowledge
B.
Problem solving
C.
Accountability
D.
Experience
Experience
Answer option D is correct.
Experience is actually part of the knowledge factor and isn't its own factor in the Hay System.
Answer option A is incorrect. Knowledge is one of the three factors in the Hay System.
Answer option B is incorrect. Problem solving is one of the three factors in the Hay System.
Answer option C is incorrect. Accountability is one of the three factors in the Hay System.
Reference: Professional in Human Resources Certification Study Guide, Sybex, ISBN: 978-0-470-
43096-5. Chapter Six: Total Rewards. Official PHR and SPHR Certification Guide, HR Certification
Institute, ISBN: 978-1-586-44149-4, Section III, The US Body of Knowledge.
Chapter: Compensation and Benefits
Objective: Total Rewards Defined
Which of the following is an example of an involuntary deduction an employer may be required to
retain from an employee's pay?
A.
Tax levy
B.
Medicare
C.
State income tax
D.
Federal income tax
Tax levy
Answer option A is correct.
A tax levy is an IRS order for an employer to retain funds from an employee's pay for taxes due in
addition to current taxes.
A tax levy, under United States Federal law, is an administrative action by the Internal Revenue
Service (IRS) under statutory authority, without going to court, to seize property to satisfy a tax
liability. The levy includes the power of distraint and seizure "by any means". The general rule is
that no court permission is required for the IRS to execute a section 6331 levy.
Answer option B is incorrect. Medicare isn't an involuntary deduction.
Answer option C is incorrect. State income taxes aren't an involuntary deduction.
Answer option D is incorrect. Federal income taxes aren't an involuntary deduction.
Reference: Professional in Human Resources Certification Study Guide, Sybex, ISBN: 978-0-470-
43096-5. Chapter Six: Total Rewards. Official PHR and SPHR Certification Guide, HR Certification
Institute, ISBN: 978-1-586-44149-4, Section III, The US Body of Knowledge.
Chapter: Compensation and Benefits
Objective: Total Rewards Defined
Which of the following is described in the statement below?
"If an employee is called by the employer for work and there is no work available, the employer
may be required by state law or employment agreements to pay for a minimum number of hours of
work."
A.
Reporting pay
B.
Hazard pay
C.
Gross pay
D.
Base pay
Reporting pay
Answer option A is correct.
If an employee is called by the employer for work and there is no work available, the employer
may be required by state law or employment agreements to pay for a minimum number of hours of
work. This is known as reporting pay.
Answer option B is incorrect. Hazard pay is additional pay for working in dangerous conditions.
Answer option C is incorrect. Gross pay is the amount earned by an employee before taxes are
not paid.
Answer option D is incorrect. Base pay is the foundation of an employer's compensation program
because it reflects the value placed on individual jobs by the organization.
Chapter: Compensation and Benefits
Objective: Total Rewards Defined
An employee earning $22,500 per year supervises three employees and spends 35 hours per
week on essential job duties that require discretion and independent judgment. Which of the
following describes this employee?
A.
Exempt, based on the executive exemption test
B.
Exempt, based on the administrative exemption test
C.
Nonexempt, based on the salary basis requirement
D.
Nonexempt
Nonexempt, based on the salary basis requirement
Answer option C is correct.
Effective in 2004, employees must be paid a minimum of $455 per week to be exempt from FLSA
requirements. This employee earns only $432.69 per week. ($22,500/52 weeks = $432.69.)
Although D is also correct, the best answer is the one that explains why. See Chapter 6 for more
information.
Chapter: Compensation and Benefits
Objective: Compensation
Beth is a nonexempt employee and she earns $17.45 per hour in her job. She has worked 40
hours this week, but management has requested that Beth work seven more hours this weekend.
What is the total payment, before taxes, that Beth will be due for her work this week?
A.
$820.15
B.
$698
C.
$1,230.22
D.
$881.22
$881.22
Beth will earn seven hours of overtime pay at $16.175 per hour, plus her regular 40 hours of pay
of $698.
Answer option A is incorrect. $820.15 does not reflect Beth's overtime for the week.
Answer option B is incorrect. $698 doesn't include the overtime pay.
Answer option C is incorrect. $1,230.22 counts all of the hours Beth has worked as overtime pay.
Reference: Professional in Human Resources Certification Study Guide, Sybex, ISBN: 978-0-470-
43096-5. Chapter Six: Total Rewards. Official PHR and SPHR Certification Guide, HR Certification
Institute, ISBN: 978-1-586-44149-4, Section III, The US Body of Knowledge.
Chapter: Compensation and Benefits
Objective: Compensation
Which of the following are the benefits of gainsharing programs?
Each correct answer represents a complete solution. Choose all that apply.
A.
Aligns employees to organizational goals
B.
Helps the organization to achieve improvement in key performance measures
C.
Enhances the focus and awareness of employees
D.
Employees are paid on the basis of group performance rather than individual performan
Aligns employees to organizational goals
Helps the organization to achieve improvement in key performance measures
Enhances the focus and awareness of employees
Answer options A, B, and C are correct.
The benefits of gainsharing programs are as follows:
1. Aligns employees to organizational goals
2. Helps the organization to achieve improvement in key performance measures
3. Enhances the focus and awareness of employees
What is gainsharing?
Gainsharing is a system of management used by a business to get higher levels of performance
through the involvement and participation of its people. As performance improves, employees
share financially in the gain (improvement). Gainsharing is about people working smarter together
and not just working harder.
Answer option D is incorrect. This is a disadvantage of gainsharing programs.
Reference: "http://simple.wikipedia.org/wiki/Gainsharing"
Chapter: Compensation and Benefits
As a HR Professional you must understand the laws and regulations, which affect employee
compensation. Which of the following was the first to address a minimum wage for employees?
A.
Davis-Bacon Act
B.
Walsh-Healey Public Contracts Act
C.
Fair Labor Standards Act
D.
Portal-to-Portal Act
Davis-Bacon Act
In 1931, the Davis-Bacon Act, was the first piece of legislation to actually establish a minimum
wage. The act was, however, limited to the construction industry.
Answer option B is incorrect. The Walsh-Healey Public Contracts Act, addressed contractors with
the federal government that exceed $10,000 to pay an established minimum wage to workers,
employed through the contract. This act was passed in 1936.
Answer option C is incorrect. The Fair Labor Standards Act, was passed in 1938, addressed
minimum wage, overtime pay, child labor, and record keeping.
Answer option D is incorrect. The Portal-to-Portal Act of 1947, clarified hours of working for the
purpose of minimum wage and overtime pay.
Reference: PHR Exam Prep, Pearson Education, ISBN: 978-0-7897-3677-2. Chapter Six: Total
Rewards. Official PHR and SPHR Certification Guide, HR Certification Institute, ISBN: 978-1-586-
44149-4, Section III, The US HR Body of Knowledge.
Chapter: Compensation and Benefits
Objective: Compensation
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