Employment Basics

Employment Basics

Are you ready to test your knowledge about employment basics? This ten-question multiple-choice quiz will explore some fundamentals regarding employee benefits, compensation packages, and individual contractors. After completing all ten questions, click "Grade Me!" at the end of the quiz to see how you did.

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What is the first thing an employer must acquire when looking to hire an employee?
An Employer Identification Number (EIN) is a unique nine-digit number that establishes your business for tax purposes. You will need an EIN to open a business bank account, apply for business licenses, and file your tax returns. You will need your EIN when you are importing goods as well from other vendors.

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What employee benefits are required under Federal law?
Social security, unemployment insurance, workers' compensation, and Family and Medical Leave benefits are all benefits that the federal government requires businesses to provide. Health insurance and family and medical leave are not federally mandated benefits for all businesses.

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Which leave benefit is required by law?
Any leave related to the Family and Medical Leave Act (FMLA) is required by law. The FMLA provides certain employees with up to 12 weeks of unpaid, job-protected leave per year to deal with certain family and medical issues. You can utilize any paid time off you have from your employer during your FMLA leave since FMLA is unpaid.

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What offers employees the opportunity to be on the same page regarding your company's policies?
The purpose of an employment handbook is to provide clear details on the way things work at your company. This should include the expectations you have of your employees, and what they can expect from you as well. Providing your employees with an employee handbook is an excellent way to accomplish this goal.

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___________ is the combination of salaries, wages, and benefits that employees receive in exchange for a particular job?
Compensation is the combination of salaries, wages, and benefits that employees receive in exchange for a particular job. From an employer's perspective, a desirable compensation package will help attract and retain the best employees. You can determine your compensation package based on other competitors in your market and your overall budget.

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What does a competitive compensation package provide your employees?
A competitive compensation package can be very inclusive when it comes to benefits. Bigger companies can compete with their competition by offering stock grants or stock options, retirement plans, and paid time off. A desirable compensation package will help attract and retain the best employees for your company.

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What reference points should you follow when crafting a potential candidate's compensation package?
When crafting a potential candidate's compensation package, it is best to take the job's value to the company and overall availability and competition for potential candidates. Potential candidates are most likely applying to multiple companies. To get the best candidate for the position, you will need to offer a competitive compensation package to sway them your way.

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When would it be a better choice to hire an Independent Contractor (IC) over an employee?
Independent Contractors (IC) are people who are self-employed and are contracted to perform specific jobs. ICs are also required to pay their own Social Security and Medicare taxes. It is best to hire an IC when there are no employees available to work on the project, you are uncertain of the demand of the job, or that your current roster of employees lacks the necessary skillset.

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What advantages are there to hire an Independent Contractor?
Independent contractors are self-employed individuals usually hired by a company to fulfill a specific job during a set time frame. One of the main advantages of hiring an IC is the money-saving potential since you do not have to pay for their Social Security and Medicare taxes. There is also flexibility with hiring an IC since you can bring in a specific skillset whenever needed.

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What does the Fair Labor Standards Act (FLSA) require of employers?
The Fair Labor Standards Act (FLSA) requires employers to pay overtime at 1.5x the pay rate for employees working over 40 hours a week. Salaried employees making over a certain amount are exempt from the FLSA and therefore do not get paid overtime.

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