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The U.S. Department of Labor’s Wage and Hour Division (WHD) enforces the FLSA, including minimum wage, overtime, and recordkeeping. The IRS enforces tax laws, SSA manages Social Security, and EEOC enforces anti-discrimination laws. CPP candidates must know which agencies govern each law, as these distinctions appear often on the exam.

Cash bonuses are always taxable and must be included in wages for federal income tax, Social Security, and Medicare purposes. Dependent care assistance up to $5,000, employer-paid health premiums, and qualified travel reimbursements are generally excluded from taxable wages. CPP candidates must identify taxable compensation types to ensure proper payroll reporting and compliance.

Pay registers (or payroll registers) are comprehensive documents summarizing all payroll activity for a specific pay period, including gross wages, deductions, taxes, and net pay. Auditors use these registers to verify whether payroll calculations comply with tax laws and company policies. The general ledger records payroll expenses but does not provide detailed individual pay information, while the employee handbook outlines policies and the I-9 verifies employment eligibility. Payroll professionals must maintain accurate and accessible payroll registers to demonstrate compliance and readiness for audits. For CPP candidates, understanding audit processes and required documentation is key to ensuring transparency, reducing compliance risks, and maintaining organizational integrity.

Step 1: Regular = 40 × $23 = $920.

Step 2: Overtime = 2 × ($23 × 1.5) = 2 × $34.50 = $69.

Step 3: Total = $920 + $69 = $989.00. Closest option = D ($989.00).

This demonstrates how overtime adds to regular earnings. CPP candidates must compute overtime correctly, as errors lead to noncompliance with FLSA.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires employers with 20+ employees to offer continuation of group health coverage after qualifying events such as termination or reduced hours. Coverage typically lasts 18–36 months. ERISA governs retirement plans, HIPAA protects health data, and FLSA covers wages. CPP candidates must know COBRA’s payroll impact on benefits administration.