You need to investigate the matter. A racially insensitive comment could be considered harassment—unwelcome behavior that’s based on a protected class such as race. Harassment becomes unlawful if putting up with it is a condition of continued employment or if the conduct is severe or pervasive enough to create a work environment a reasonable person would consider intimidating, hostile, or abusive. (Note: Several states have lowered the bar for what constitutes illegal harassment and no longer require that certain behavior be severe or pervasive. This Q&A addresses the standards under federal law.)
If you find evidence that harassment or any policy violations occurred, you should follow up with the offending employee. Your response should match the severity of the offense. A mildly insensitive comment might warrant an educational conversation or a warning, whereas a racial slur might warrant a final warning or termination, depending on the circumstances.
Make sure to formally Document your findings and any disciplinary actions taken.
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