Chapter 5 - Paying The Ee

Front 1

What laws govern how often an er must pay it's ee?

Back 1

state laws

Front 2

What are some of the advantages and disadvantages of direct deposit for an er?

Back 2

Advantages: prevent lost/stolen checks, do not have to cash a check, less ck stock, er does not have to file cashed cks, etc.
Disadvantages: can not be made mandatory, not paperless, er can not dictate which bank is used, er loss of interest on payroll funds before chk clears

Front 3

what laws cover unclaimed paychecks, and what is generally required of the er?

Back 3

state escheat laws
er must try to locate/contact ee
file an annual report where the ee resides
hold the cks for a certain period of time before turning them over to the state

Front 4

Explain the process of prenotification under the Automated Clearing House system.

Back 4

prenotification is sending a zero dollar amount through the ach network to test the account information for an ee. this is optional. must be sent at leaast 6 days before the actual pay is sent through.

Front 5

Many critics claim that direct deposit is not paperless. Why?

Back 5

authorization agreements must be attained to go to direct deposit and the er must still provide a deposit advice to the ee

Front 6

What are some of the problems that may arise when periodic pay is reduced as a result of an extra pay day caused by the calendar?

Back 6

main problem is whether to recompute weekly or biweekly for exempt salaried ees who are earning a certain amount annually. er's are free to reduce the ee's pay as long as there is no contract and it doesn't take them below the mimimum pay required by fed/state law.

Front 7

What are some of the benefits for er's in paying ee's with electronic paycards?

Back 7

reduced costs for manual checks/lost stolen/stop payments
enhanced efficientcy by eliminating paper paychecks
all ee's are eligible
increased ee productivity
reduction of escheat issues

Front 8

What is a branded pay card?

Back 8

has visa, mastercard, discover imprinted on it and can be used anywhere those brands are accepted

Front 9

What are the steps invovled in establishing an electronic funds transfer?

Back 9

written authorization from ee
er prepared an automated file sent to the financial institution with the ability to process called an originating depository financial institution
the odfi processes the file through the ach operator
the ach operator processes the file between the two financial institutions
the receiving depository financial institution rdfi, posts the payment to the ee account

Front 10

List the disadvantages of paying ee's by paycheck as far as the er is concerned.

Back 10

lost or stolen checks
unclaimed/uncashed cks
ee time off needed to cash ck
storage of cashed cks and related docs
early prep of vacation cks
reconciliation of bank acct with outstanding cks

Front 11

TF1
The flsa regulates how often ees must be paid by their er or how soon they must be paid after performing services

Back 11

false the state does

Front 12

TF2
Direct deposit is one area where the federal and state governments share regulatory responsibility.

Back 12

true

Front 13

TF3
The flsa regulates the payment of wages on termination of employerment.

Back 13

false
the state

Front 14

TF4
All states regulate the payment of wages owed to deceased ee's

Back 14

false
more than 15 states have no statutory provisions dealing with payment of wages to deceased ee's

Front 15

TF5
A worker who is regulary paid on a weekly basis may receive 53 wage payments in a year.

Back 15

true

Front 16

TF6
Under a direct deposit system, the ee's wages are deposited by electronic funds transfer into their personal accts in one or more financial institutions.

Back 16

true

Front 17

TF7
A biweekly salary is paid twice a month, usually on the 15th and last day of the month.

Back 17

false

Front 18

TF8
On payday, the rdfi is responsible for crediting the ee's account when direct deposit is used as a method of payments.

Back 18

true

Front 19

TF9
Federal Reserve Board Regulation E stabilished the basic rights, requirements and liabilities for the protection of the ees being paid through EFT.

Back 19

TRUE

Front 20

TF10
If 250 or more ees consent to direct deposit, then all ee's must comply.

Back 20

false
NO minimum
state regulated

Front 21

TF11
The flsa requires that ees be paid at least monthly.

Back 21

false

Front 22

TF12
A paycheck is classified as a negotiable instrument.

Back 22

true

Front 23

TF13
Most states require ers to contact ees in an attempt to keep unclaimed wages from becoming abandoned.

Back 23

true

Front 24

TF14
When selecting a paycard vendor, it is not important for an er to determine whether the vendor can comply with state wage payment requirements.

Back 24

false

Front 25

TF15
Reduced escheat issues is not an er benefit of implementing a paycard program.

Back 25

false

Front 26

MC1
According to NACHA - The electronic payments association, what was the portion of the us that had their pay directly deposited in 2011?
a. 90%
b. 25%
c. 74%
d. 33%

Back 26

c

Front 27

MC2
The er prepares an automated file of direct deposit records that indicates where its ee's pay is to be deposited. What is the name of the financial institution where this file is then sent?
a. automated clearing house
b. originiating depository financial institution
c. nacha
d. receiving depository financial institution

Back 27

b

Front 28

MC3
How many years must an er keep the authorization agreenment for direct deposit after revocation by the ee?
a. at least 2 yrs
b. at least 1 yr
c. there is no retention agreement
d. at least 3 years

Back 28

a

Front 29

MC4
What are escheat laws?
a. federal laws governing the treatment of unclaimed wages as abandoned property
b. state laws governing the treatment of unclaimed wages as abandoned property
c. state laws protecting ees from their ers
d. state laws outlining the frequency with which ees are paid

Back 29

b

Front 30

MC5
Which day of the week occurs 53 time sin 2012?
a. sunday
b. wednesday
c. saturday
d. thursday

Back 30

a

Front 31

MC6
Once the ee has given authorzation for EFT and the er creates electronic pay transactions for deposit, where does the er send them?
a. ach
b. rdfi
c. odfi
d. nacha

Back 31

c

Front 32

MC7
Under the eft system, what participating party receives the individual transacations and posts them to the customers/ees account?
a. odfi
b. ach
c. rdfi
d. nacha

Back 32

c

Front 33

MC8
Which of the following laws and regulations does not regulate eft?
a. federal reserve board regulation e
b. title ix of the consumer credit protection act
c. flsa
d. electronic funds transfer act

Back 33

c

Front 34

MC9
Which of the following agencies made it necessary for nacha to adopt rules creating speical requriemtns of internation ach transactions?
a. irs
b. federal reserve board
c. department of state
d. office of foreign assets control

Back 34

d

Front 35

MC10
Which of the following participants in the direct deposit process distributes eft payments to the receiveing financial institutions?
a. odfi
b. ach
c. rdfi
d. frb

Back 35

b

Front 36

MC11
Which of the following stpes must an er take before initiating the internation ach transacation iat?
a. contact the office of foreign assets control to let them know about the iat
b. no steps need to be taken
c. add coding to the transaction that identifies it as an iat
d. contact the rdfi to let them know that an iat is being processed.

Back 36

c

Front 37

MC12
Which of the following features is a possible disadvantage of the direct deposit system to the er?
a. direct deposit
b. loss of float
c. check printing cost
d. check storage cost

Back 37

b

Front 38

MC13
Which of the following is not an er benefit of using pay cards to pay ee wage?
a. reduced cost for off cycle checks
b. all ees are elibible for electronic pay
c. increased escheat issues
d. increased ee productiviity becasue of less tiem spent cashing the check

Back 38

c

Front 39

MC14
Which of the following is NOT an ee benfit of using paycards to pay ee wages?
a. eliminating check cashing fees
b. increased risk of paycheck theft
c. protection from loss because pay card can be replaces
d. no time or geographic limitations on funds access

Back 39

b