CSP Risk Management & Mitigation 2 — Questions and Answers
Question 1: A staffing firm places a temp worker at a client site where the worker is injured. Under co-employer doctrine, which party typically bears primary responsibility for workers' compensation?
- The staffing firm as the legal employer of record (Correct answer)
- The client company as the worksite controller
- The injured worker because they accepted the assignment
- OSHA as the regulatory authority
Correct answer: The staffing firm as the legal employer of record
The staffing firm, as the worker's legal employer of record, is generally the primary carrier of workers' compensation coverage.
Question 2: Which practice best protects a staffing firm when a client demands that a placed worker be immediately terminated without cause?
- Complying immediately to preserve the client relationship
- Requiring the client to submit termination requests in writing (Correct answer)
- Refusing all client-directed terminations to protect workers
- Asking EEOC for guidance before acting
Correct answer: Requiring the client to submit termination requests in writing
Requiring written termination requests creates documentation that protects the staffing firm if a wrongful termination claim arises.
Question 3: A staffing firm fails to verify a candidate's professional license before placement, and the unqualified worker causes client losses. What type of liability does the firm face?
- Negligent hiring liability (Correct answer)
- Vicarious liability only
- Strict product liability
- Respondeat superior immunity
Correct answer: Negligent hiring liability
Negligent hiring occurs when an employer fails to exercise reasonable care in verifying a candidate's qualifications before placement.
Question 4: To mitigate the risk of wage theft claims, staffing firms should ensure client contracts explicitly address which of the following?
- Reimbursement of wages if the client disputes hours worked
- Client obligation to report worker hours accurately and timely (Correct answer)
- Worker authorization to waive overtime requirements
- Flat fee billing regardless of hours worked
Correct answer: Client obligation to report worker hours accurately and timely
Contractually obligating clients to report hours accurately and timely protects staffing firms from wage theft exposure caused by client-side errors.
Question 5: Which insurance type is most critical for a staffing firm to carry to cover claims that a placed worker's negligence injured a third party?
- Employment practices liability insurance (EPLI)
- Commercial general liability (CGL) insurance (Correct answer)
- Professional indemnity insurance
- Directors and officers (D&O) insurance
Correct answer: Commercial general liability (CGL) insurance
Commercial general liability insurance covers bodily injury or property damage caused by the firm's placed workers to third parties.
Question 6: A staffing agency discovers a client is using temps in roles that exceed the agreed scope of work, increasing accident risk. What is the agency's best immediate action?
- Ignore the issue to avoid client conflict
- Issue a written notice to the client and update the service agreement scope (Correct answer)
- Pull all workers from the site immediately
- File an OSHA complaint on the client's behalf
Correct answer: Issue a written notice to the client and update the service agreement scope
Issuing written notice and updating the service agreement documents the risk, establishes accountability, and formally corrects the scope.
Question 7: Under the ACA's employer shared responsibility provisions, which staffing firm workers are most likely to trigger coverage obligations?
- Temporary workers on assignments under 30 days
- Part-time workers averaging fewer than 20 hours per week
- Full-time equivalent workers averaging 30+ hours per week over applicable look-back period (Correct answer)
- Independent contractors classified by the client
Correct answer: Full-time equivalent workers averaging 30+ hours per week over applicable look-back period
The ACA defines full-time employees as those averaging 30 or more hours per week, triggering employer shared responsibility obligations for coverage.
CSP Risk Management & Mitigation 2
A staffing firm places a temp worker at a client site where the worker is injured.
Under co-employer doctrine, which party typically bears primary responsibility for workers' compensation?