Funeral Arts National Board Practice Exam

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Prepare for the Funeral Arts National Board Exam. Utilize flashcards, multiple choice questions, and gain insightful hints with detailed explanations. Ensure your readiness for this crucial examination!

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Which federal act requires employers to withhold a portion of employee wages for retirement benefits?

Affordable Care Act
Social Security Act
Federal Insurance Contributions Act
Fair Labor Standards Act

The correct answer is: Federal Insurance Contributions Act

The Federal Insurance Contributions Act (FICA) is the legislation that mandates employers to withhold a specific percentage of employee wages to fund Social Security and Medicare. This program is designed to provide financial support for retirees, the disabled, and survivors of deceased workers. FICA contributions are automatically deducted from employees' paychecks and are also matched by employers, ensuring a stable revenue stream for these federal programs. The Affordable Care Act focuses on health insurance and does not pertain to retirement benefits or wage withholding. The Social Security Act established the Social Security program itself, but it is the Federal Insurance Contributions Act that specifically goes into the mechanics of wage withholding for Social Security and Medicare. The Fair Labor Standards Act primarily regulates labor standards such as minimum wage and overtime pay, rather than financial contributions toward retirement benefits. Therefore, FICA is the correct answer as it directly relates to the withholding of wages for retirement through Social Security contributions.