CSP Risk Management & Mitigation 3 — Questions and Answers
Question 1: A staffing firm's client insists on conducting background checks on candidates before the firm does. What is the primary risk this arrangement creates?
- The client may reject candidates before the firm can evaluate them
- The client may violate FCRA requirements, exposing the staffing firm to shared liability (Correct answer)
- Background checks by clients are prohibited under federal law
- The staffing firm loses EEOC safe harbor protection
Correct answer: The client may violate FCRA requirements, exposing the staffing firm to shared liability
When clients conduct background checks, FCRA compliance obligations may be triggered, and improper procedures can expose the staffing firm to liability as well.
Question 2: Which scenario most clearly creates a joint employer relationship that increases a staffing firm's legal exposure?
- The staffing firm sets all worker pay rates independently
- The client controls day-to-day supervision, scheduling, and work methods of placed workers (Correct answer)
- Workers sign arbitration agreements with the staffing firm only
- The client reimburses the staffing firm for workers' compensation premiums
Correct answer: The client controls day-to-day supervision, scheduling, and work methods of placed workers
Courts typically find joint employer status when the client exercises substantial control over workers' daily tasks, schedules, and working conditions.
Question 3: To reduce unemployment insurance (UI) risk, staffing firms should include which provision in their worker agreements?
- A waiver of UI benefits upon assignment completion
- A requirement that workers notify the firm of assignment end and accept reassignment offers (Correct answer)
- An agreement that workers will not file UI claims for 90 days
- A clause transferring UI tax rate to the client company
Correct answer: A requirement that workers notify the firm of assignment end and accept reassignment offers
Requiring workers to contact the firm for reassignment at assignment end can reduce UI liability by demonstrating continued work availability.
Question 4: A client requests that a staffing firm supply only workers of a specific age group for a customer-facing role. What is the staffing firm's correct response?
- Comply if the client signs an indemnification agreement
- Refuse and educate the client that age-based selection violates the ADEA (Correct answer)
- Flag the request for legal review but tentatively proceed
- Supply the workers only if the client is under 20 employees
Correct answer: Refuse and educate the client that age-based selection violates the ADEA
Age-based worker selection violates the Age Discrimination in Employment Act (ADEA), and a staffing firm must refuse such discriminatory requests.
Question 5: What is the primary purpose of including a 'right to audit' clause in a staffing firm's client service agreement?
- To allow the client to renegotiate billing rates at any time
- To let the staffing firm verify the client's compliance with safety and employment law obligations (Correct answer)
- To grant the staffing firm access to the client's financial statements
- To enable the firm to replace underperforming workers without notice
Correct answer: To let the staffing firm verify the client's compliance with safety and employment law obligations
A right to audit clause lets the staffing firm verify client-side compliance with wage, safety, and other legal obligations that affect the firm's liability.
Question 6: A staffing firm's placed worker is sexually harassed by a client supervisor. Under Title VII, which statement is most accurate regarding the staffing firm's liability?
- The staffing firm has no liability because it does not control the worksite
- The staffing firm may share liability if it knew or should have known and failed to act (Correct answer)
- Only the client is liable because the harasser was their employee
- The worker must sue only the harasser individually
Correct answer: The staffing firm may share liability if it knew or should have known and failed to act
Staffing firms can be held liable under Title VII if they had notice of harassment and failed to take reasonable corrective action.
Question 7: Which action best demonstrates a staffing firm's commitment to proactive risk management in its placement operations?
- Waiting for clients to report incidents before investigating
- Conducting pre-placement worksite safety assessments for all new clients (Correct answer)
- Excluding all high-risk industries from its client base
- Delegating all safety compliance decisions to placed workers
Correct answer: Conducting pre-placement worksite safety assessments for all new clients
Pre-placement worksite safety assessments allow staffing firms to identify hazards before workers are placed, reducing injury risk and liability.
CSP Risk Management & Mitigation 3
A staffing firm's client insists on conducting background checks on candidates before the firm does.
What is the primary risk this arrangement creates?