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WorldatWork Regulatory Environments for Compensation Programs Sample Questions:

1. A medical benefits plan provision ensuring that the correct plan is paying expenses when the member is covered under more than one plan is known as what?

A) Out-of-pocket expenses
B) Deductible
C) Coordination of benefits
D) Coinsurance

2. On what basis does the Equal Pay Act of 1963 prohibit an employer from discriminating in employee compensation programs?

A) Race
B) Religion
C) Sex
D) Age

3. Your company has had a strong fiscal year with a 15% increase in net income over the prior fiscal year. Share prices are at an all time high. Working with Finance, you have arrived at a 2.5% merit increase budget for the next fiscal year, a smaller increase than the last fiscal year. Finance has indicated that some large capital expenditures will be needed next year, so the company needs to conserve resources. Additionally, Legal is in final negotiations on a lawsuit that may be very costly to the company. Word of the smaller increases has line management concerned that they will lose their best performers. Given all of these factors, what is your best course of action?

A) Recommend a reduction in force to eliminate poor performers, which will increase the merit budget by reducing headcount
B) Meet with Finance and make a case for a larger merit increase budget because the loss of key talent will cost more over the long term than the savings from the smaller merit increases
C) Implement the merit increase budget as is because the anticipated financial obligations have made it necessary
D) Gather the perspectives of all stakeholders, analyze their individual concerns and meet to determine whether a compromise solution is possible

4. Which of the following acts is focused on employers with service contracts with the government?

A) National Labor Relations Act
B) McNamara-O'Hara Act
C) Sherman Antitrust Act
D) Davis-Bacon Act

5. Which of the following statements best describes defined benefit (DB) plans?

A) They are often integrated with government-sponsored programs.
B) Employees are at risk for financial resources.
C) There is no promise of a specific benefit at retirement.
D) Individual accounts must be maintained for each participant.

Solutions: