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MCLE Test and Answer Sheet

Test No. 99: Personnel Impact (October 2001 LA Lawyer)

Instructions for Obtaining MCLE Credits

1.Study the CLE article in this issue.

2.Answer the test questions by marking the appropriate boxes. Each question has only one answer. Photocopies of this answer sheet may be submitted; however, this form should not be enlarged or reduced.

3.Mail the answer sheet and the $15 testing fee ($20 for non-LACBA members) to:
Los Angeles Lawyer
MCLE Test
P.O. Box 55020
Los Angeles, CA 90055
Make checks payable to Los Angeles Lawyer.

4.You can also fill in the test form and submit it directly to LACBA by clicking "Submit." To submit your test answers online you will need to pay by credit card. After submitting your answers you will be presented with a screen requesting payment information. This information will be submitted in a secure mode which will allow you to safely transmit your credit card number over the Internet. If you prefer not to pay by credit card, please print this answer sheet and submit your responses by regular mail.

5.Within six weeks, Los Angeles Lawyer will return your test with the correct answers, a rationale for the correct answers, and a certificate verifying the CLE credit you earned through this self-assessment activity.

6.For future reference, please retain the CLE test materials returned to you.
Test Sheet

Mark your answers to the test by clicking next to your choice. Each question has only one answer. This test is worth 1 hour of credit.*

1. Under the WARN Act, at least how many days' notice must a company with 100 or more employees give to employees who will be affected by a mass layoff or plant closure?
A. 50 days.
B. 14 days.
C. 60 days.
D. 30 days.

2. The exceptions to the WARN Act advance notice requirement still require that the employer give as much notice as practicable.
True.
False.

3. If a company fails to comply with the WARN Act, the company is liable to each affected employee for:
A. The employee's daily wages and benefits for each day of the company's violation within the prescribed notice period.
B. The relocation costs for the employee.
C. The employee's daily wages for each day of the company's violation within the prescribed notice period.
D. An amount equal to 30 days' wages plus all accrued vacation pay.

4. California employers, regardless of their number of employees, must immediately pay laid off or discharged employees all wages earned through the end of their employment.
True.
False.

HYPOTHETICAL 1
Alpaca.com, an Internet service provider, employs 105 people at three locations in California. The company provides a wide range of Internet services, including Web hosting and design. All employees have two weeks' paid vacation per year along with health benefits. The company's Web designers are paid commissions in addition to their base salary. Under Alpaca.com's commission plan, commissions are earned when customers pay for the design of their Web pages.
5. Due to a sudden and unforeseen downturn in its Web design services, Alpaca.com must close its second design facility, which employs 51 people. Under the WARN Act, Alpaca.com must give 60 days' notice to the affected employees.
Ture.
False.

6. Upon their discharge, the Web designers immediately should be paid:
A. Their base salary.
B. Their base salary and benefits, not including vacation pay.
C. Their base salary, benefits (including vacation pay), and calculated commissions earned to date.
D. Nothing. All monies owed can be mailed within 72 hours.

HYPOTHETICAL 2
DotTheDot.com, a search engine, began operations with a limited budget. To attract employees it offered incentive stock options (ISOs). Employees were told that the stock was sure to increase in value because the company would soon go public. On the basis of this information, employees agreed to lower salaries in exchange for shares of stock. DotTheDot.com never went public and recently had to lay off 30 of its 50 employees. The company also experienced a severe cash flow problem and used withheld employee taxes to pay several creditors.
7. The 30 former DotTheDot.com employees do not have a claim under California law because federal law regulates ISOs.
True.
False.

8. As a result of the company's actions involving employee taxes, the government may impose a 100 percent tax penalty on:

A. The corporate entity, DotTheDot.com.
B. Any corporate employee responsible for paying the taxes.
C. The employees whose taxes were not paid.
D. A and B.
E. None of the above.

9. ESOPs are employee stock ownership plans that:
A. Are regulated by federal law under ERISA.
B. Are not subject to ERISA regulations.
C. Can expose plan administrators to personal liability for plan mismanagement.
D. A and C.
E. B and C.

10. Under COBRA, a terminated employee is entitled to 18 months of free medical coverage.
True.
False.

11. Cal-COBRA applies to employers who would not be covered under the federal COBRA statute.
True.
False.

12. Under the WARN Act, employers must notify employees of mass layoffs even if the entire company is not being shut down.
True.
False.

13. Under California law, an employee who voluntarily resigns should receive all monies owed:
A. On the employee's last day of employment.
B. On the employee's last day of employment if the employee gave 72 hours' notice.
C. On the employee's last day of employment if the employee gave two weeks' notice.
D. On the employee's next regularly scheduled company payday.

14. California law does not allow "use it or lose it" vacation policies.
True.
False.

15. Under California law, if an employer willfully fails to pay money owed to a terminated employee at the time of termination:
A. The employer may be fined double the equivalent of the terminated employee's salary for 30 days.
B. The employer may be fined $5,000 plus the equivalent of the terminated employee's salary and benefits for up to 60 days.
C. The employer may be fined the equivalent of the terminated employee's daily wages for each day of the violation until wages are paid in full.
D. The employer may be fined the equivalent of the terminated employee's daily wages for each day of the violation up to 30 days.

16. Employers who withhold all or part of an employee's final paycheck in order to pay creditors of the business have a defense against penalties for late wage payments because the withholding of the wages was not a willful violation of the applicable law.
True.
False.

17. To avoid fines for failing to pay all money owed to a terminated employee, employers should include a letter with the employee's final paycheck, advising:
A. How to apply for unemployment benefits.
B. That any remaining compensation owed will be paid as soon as it is calculated.
C. That retraining is available through the auspices of California's state government.
D. A and C.

18. California law does not allow an employer to shift business losses to its employees by offsetting the losses against employee compensation.
True.
False.

19. Under California law governing vacation policies for employees:
A. Paid vacations are mandatory.
B. Employers can establish limits on how much vacation time an employee may accrue.
C. Employers with a vacation policy must pay a terminated employee any unused accrued vacation pay.
D. B and C.
E. None of the above.

20. The office of the California Labor Commissioner accords priority to the enforcement of an employer's obligations to pay final wages earned by a terminated employee.
True.
False.

Address and Billing 
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If you do not wish to complete this transaction over the Internet you should print this page and send it to the address listed in Step 3 of the instructions at the top of this page.


*The Los Angeles County Bar Association has been approved as a continuing legal education provider of Minimum Continuing Legal Education credit by The State Bar of California. This self-assessment activity will qualify for Minimum Continuing Legal Education credit by The State Bar of California in the amount of one hour.

   
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