Risk Management & Mitigation Flashcards
7 cards from real CSP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Risk Management & Mitigation flashcards as text
A staffing firm places a worker at a client site without issuing a formal service agreement. If the worker is injured, what is the most significant risk this creates for the firm?
Answer: The firm lacks contractual protections for indemnification, safety obligations, and scope of work
Without a service agreement, the staffing firm has no contractual basis to allocate safety responsibilities, seek indemnification, or define the scope of the engagement.
How does the WARN Act affect staffing firms when a client company that employs large numbers of temporary workers conducts a mass layoff?
Answer: The staffing firm may be obligated to provide 60-day notice if temps are counted toward the employment threshold
Temporary workers placed at a single site may count toward the 100-employee threshold triggering WARN Act obligations, potentially exposing the staffing firm.
A staffing firm's employment practices liability (EPLI) policy is likely to cover which of the following claims?
Answer: A candidate's wrongful rejection claim alleging discriminatory hiring practices
EPLI policies cover claims alleging discriminatory, wrongful, or harassing employment practices, including discriminatory candidate rejection.
Which recordkeeping practice is most important for defending against a misclassification audit by the IRS or DOL?
Answer: Documenting the behavioral, financial, and relationship-of-the-parties factors used to classify each worker
Documenting the three-factor analysis (behavioral, financial, type of relationship) used for classification provides the evidence base needed to defend an IRS or DOL audit.
A staffing firm's client requests that the firm supply workers for a project in another state where the firm is not yet registered as a foreign business entity. What is the primary risk?
Answer: The firm may face state tax, employment law compliance, and registration penalties for operating without authorization
Operating in a new state without proper business registration exposes the staffing firm to penalties, back taxes, and unenforceability of contracts in that jurisdiction.
Which type of staffing arrangement carries the highest risk of IRS reclassification from independent contractor to employee status?
Answer: A contractor working full-time at a single client site under daily client supervision for 18 months
Long-term, full-time work at a single client with daily supervision are strong behavioral and financial control indicators pointing to employee status under IRS criteria.
A staffing firm's client refuses to complete a required safety training form before temporary workers begin. What is the firm's best risk management response?
Answer: Withhold placement until the client completes the safety documentation requirement
Withholding placement until safety documentation is complete protects workers from unmitigated hazards and shields the firm from OSHA liability.