Deck 5: Employee Payroll and Deduction Policies and Guidelines

Question 1

Employees do not need to be notified when court order with-holdings are requested since they should be aware of the situation already.

Answer 1

False

Question 2

Employers should maintain documentation showing that employees have accepted any required non-statutory deductions.

Answer 2

True

Question 3

Finding out that an employee has an outstanding court order related to unpaid debts can be upsetting to the employer and is grounds for termination of employment.

Answer 3

False

Question 4

If a sales clerk is short on their till at the end of the night, the employer can deduct the amount of the shortage off their next pay.

Question 5

If a gas attendant is on duty at the time when a customer leaves without paying, the employer can deduct the amount of the lost payment off their next pay.

Question 6

If group insurance premiums are partially paid by the employee and the employee has acknowledged this deduction in writing, the employer can deduct the cost directly from each pay.

Question 7

Defined contribution benefit plans are valued by employees because the payment at the retirement is known in advance.

Question 8

Employees bear the risk of market fluctuation when they have defined benefit pension plans.

Question 9

Employees bear the risk of market fluctuation when they have defined contribution pension plans.

Question 10

Employer optional deductions such as social club memberships should be deducted first, before statutory deductions are made in case the employee runs out of money to cover off the extras.

Question 11

Until the money is due, deductions taken off employee payments can be used to cover operating expenses for the business.

Question 12

If gross earnings less statutory deductions for an employee in Ontario with a family support Garnishment Order equal $1500, what is the maximum amount that can be deducted for the Order?

A) $0
B) $750
C) $300
D) $1500
E) $1250

Question 13

If gross earnings less statutory deductions for an employee in Ontario with a non-family support Garnishment Order equal $1500, what is the maximum amount that can be deducted for the Order?

A) $1250
B) $1500
C) $0
D) $750
E) $300

Question 14

What is the maximum amount, by percentage, that a family support order may direct the employer to with-hold?

A) 20%
B) 10%
C) 30%
D) 40%
E) 50%

Question 15

An employee with an outstanding family support Garnishment Order asks you to allow him to make his RRSP contributions before the available garnishment amount is calculated. You must:

A) Agree and do as asked as it is his pay
B) Terminate the employee immediately for trying to skip out on his family responsibilities
C) Calculate the amount after all deductions are applied including voluntary
D) Calculate the amount after all statutory deductions are applied
E) Contact his supervisor immediately and inform him about the terms of the Garnishment Order

Question 16

The following is not an example of a statutory deduction.

A) Employment Insurance Premiums
B) Provincial Taxes
C) Canada Pension Plan Contributions
D) Federal Taxes
E) Union Dues

Question 17

If an employee disagrees with the terms outlined in a Garnishment Order the payroll administrator should:

A) Cease all deductions until the issue is resolved
B) Contact the court to discuss the employee objection
C) Deduct additional amounts in case the employee decides to quit over the disagreement
D) Continue to follow the terms of the order until advise by the court otherwise
E) Follow directions provided by the employee regarding how they would like the matter handled

Question 18

A Garnishment Order may not be issued by:

A) A Credit Union (where the member has signed an Assignment of Wages)
B) Small Claims Court
C) Canada Revenue Agency
D) Creditors (where the member has signed an Assignment of Wages)
E) The Federal Court of Canada

Question 19

The following statement is not true regarding employer sponsored Registered Retirement Savings Plans.

A) Fees are usually lower than for individuals.
B) Employee access is often limited to the principal or interest income prior to retirement.
C) The final retirement benefit is known in advance.
D) Allow employers to reduce taxes from source deductions.
E) Contributions may be made by the employer, the employee or both depending on the structure of the plan.

Question 20

An employee has a family support order demanding $500 per weekly pay be with-held. If the employee has a gross taxable income of $1000, can the full amount be deducted on this pay?

A) Yes
B) No
C) Maybe, if the employee does not have any voluntary deductions
D) Maybe, if the employee has many tax credits
E) There isn't enough information to say for sure

Question 21

Name the 3 Statutory Deductions in Canada.

Question 22

What steps are recommended when a Garnishment Order is received by the employer?

Question 23

What should be acknowledged in the employee written permission for employer optional deductions?

Question 24

List 3 examples of employer optional deductions that may be authorized by the employer for the employee's benefit.

Question 25

List the order of priority of deductions for an employee.