Risk Management Flashcards

A company uses a vendor's AI resume-screening tool that turns out to disadvantage older applicants. Who is primarily exposed to liability under federal anti-discrimination law?

Answer: The employer that uses the tool for its hiring decisions

The EEOC has said employers can be liable for discriminatory outcomes from selection tools even when a vendor developed them.

New York City Local Law 144 requires employers using automated employment decision tools to do what?

Answer: Conduct an independent bias audit and give candidates notice

Local Law 144 requires an annual independent bias audit, public posting of the results, and notice to candidates.

What is the best risk-control practice for voluntary demographic self-identification data?

Answer: Keep it confidential, voluntary, and separate from decision-making files, with restricted access

Keeping self-ID data separate and access-restricted reduces both privacy risk and claims that it influenced employment decisions.

Under the Civil Rights Act of 1991, what is the combined cap on compensatory and punitive damages per plaintiff for a Title VII claim against an employer with more than 500 employees?

Answer: $300,000

Caps range from $50,000 to $300,000 depending on employer size, with $300,000 for employers with more than 500 employees.

Which race discrimination claim is NOT subject to the Title VII statutory damages caps?

Answer: A claim under 42 U.S.C. Section 1981

Section 1981 race discrimination claims allow uncapped compensatory and punitive damages and do not require an EEOC charge.

When the organization receives a harassment complaint, which investigation feature best lowers legal risk?

Answer: A prompt, thorough, and impartial investigation with documented findings and follow-up

Prompt, impartial, documented investigations support the employer's reasonable-care defense and limit liability.

Which federal law requires covered employers to reasonably accommodate known limitations related to pregnancy, childbirth, or related medical conditions?

Answer: The Pregnant Workers Fairness Act

The PWFA, effective June 2023, requires employers with 15 or more employees to reasonably accommodate known pregnancy-related limitations.