SBA Regulatory Compliance & Risk Management 2 — Questions and Answers
Question 1: Under the Americans with Disabilities Act (ADA), which threshold triggers the requirement for small businesses to provide reasonable accommodations to employees?
- 5 or more employees
- 10 or more employees
- 15 or more employees (Correct answer)
- 25 or more employees
Correct answer: 15 or more employees
The ADA applies to employers with 15 or more employees, requiring them to provide reasonable accommodations unless it causes undue hardship.
Question 2: A small business owner discovers a data breach exposing 600 customers' personal information. Under most U.S. state breach notification laws, the owner must primarily:
- File a report with the SBA within 24 hours
- Notify affected individuals and relevant state authorities promptly (Correct answer)
- Obtain cyber insurance before notifying anyone
- Wait 90 days to assess full damage before disclosure
Correct answer: Notify affected individuals and relevant state authorities promptly
State breach notification laws generally require timely notice to affected individuals and often to state attorneys general or regulators.
Question 3: Which federal agency enforces the Occupational Safety and Health Act (OSH Act) for most private-sector small businesses?
- SBA Office of Inspector General
- Equal Employment Opportunity Commission (EEOC)
- Occupational Safety and Health Administration (OSHA) (Correct answer)
- Department of Commerce
Correct answer: Occupational Safety and Health Administration (OSHA)
OSHA, within the Department of Labor, enforces workplace safety and health standards for private-sector employers.
Question 4: A risk transfer strategy most commonly used by small businesses to shift potential financial losses to a third party is:
- Risk avoidance
- Risk retention
- Risk insurance (Correct answer)
- Risk reduction
Correct answer: Risk insurance
Purchasing insurance transfers the financial consequence of specified risks to an insurer, which is the primary risk-transfer tool for small businesses.
Question 5: The Fair Labor Standards Act (FLSA) establishes which of the following for covered small businesses?
- Mandatory health insurance contributions
- Minimum wage and overtime pay requirements (Correct answer)
- Maximum allowable working hours per week
- Mandatory retirement plan enrollment
Correct answer: Minimum wage and overtime pay requirements
The FLSA sets the federal minimum wage and requires overtime pay of at least 1.5 times the regular rate for hours worked over 40 in a workweek.
Question 6: When assessing operational risk, a small business should prioritize risks based on which two primary dimensions?
- Cost and timeline
- Likelihood and impact (Correct answer)
- Visibility and complexity
- Frequency and industry sector
Correct answer: Likelihood and impact
Risk prioritization matrices evaluate each risk by its probability of occurring (likelihood) and the severity of its consequences (impact).
Question 7: Which SBA program provides free, confidential business counseling and is a key resource for understanding compliance obligations?
- SCORE Mentors (Correct answer)
- SBA Office of Advocacy
- SBA Office of Inspector General
- National Labor Relations Board
Correct answer: SCORE Mentors
SCORE is a nonprofit partner of the SBA that offers free mentoring and workshops, including guidance on regulatory compliance for small businesses.
SBA Regulatory Compliance & Risk Management 2
Under the Americans with Disabilities Act (ADA), which threshold triggers the requirement for small businesses to provide reasonable accommodations to employees?