Employment Testing: A Career Tool Fact Sheet for Employers

Employers frequently utilize tests and various selection procedures as a crucial part of their process for evaluating candidates for both initial hiring and internal promotions. These tools, ranging from cognitive and personality assessments to medical evaluations, credit checks, and criminal background inquiries, serve as a vital means to identify the most qualified individuals for specific roles within an organization. When used correctly, employment testing is an invaluable Career Tool Fact Sheet for ensuring a competent and capable workforce.

However, the implementation of tests and selection procedures carries significant legal responsibilities. Federal anti-discrimination laws strictly prohibit the intentional use of these tools to discriminate based on protected characteristics such as race, color, sex, national origin, religion, disability, or age (specifically for individuals 40 and older). Furthermore, even seemingly neutral tests can be unlawful if they inadvertently and disproportionately exclude individuals within these protected groups, unless the employer can demonstrate a legally sound justification for the test’s use.

To address these critical issues, the Equal Employment Opportunity Commission (EEOC) convened a public meeting on May 16, 2007, specifically focusing on Employment Testing and Screening. This meeting provided a platform for expert witnesses to discuss the legal complexities surrounding employment tests and other selection methods. Detailed testimonies from this meeting are publicly available on the EEOC website (http://eeoc.gov/eeoc/meetings/archive/5-16-07/index.html).

This fact sheet serves as a technical assistance resource, offering guidance on navigating common legal issues related to federal anti-discrimination laws and the appropriate utilization of tests and selection procedures throughout the employment lifecycle. This document aims to be a helpful career tool fact sheet for employers seeking to create fair and legally compliant hiring practices.

Background

Several key pieces of legislation form the foundation for regulating employment testing and selection. Title VII of the Civil Rights Act of 1964 (Title VII), the Americans with Disabilities Act of 1990 (ADA), and the Age Discrimination in Employment Act of 1967 (ADEA) all explicitly prohibit the use of discriminatory employment tests and selection procedures.

The increasing reliance on employment testing can be attributed to several factors. Heightened security concerns since 9/11, coupled with a greater focus on workplace violence prevention, safety, and liability mitigation, have driven employers to seek more rigorous screening methods. Additionally, the widespread adoption of online job applications has resulted in a surge of applicants, prompting employers to adopt efficient, objective methods for initial screening.

The impact of these trends is reflected in the number of discrimination charges related to employment testing. In Fiscal Year 2007, the EEOC saw a peak of 304 charges specifically addressing employment testing and exclusions based on criminal background checks, credit reports, and other selection procedures, highlighting the ongoing importance of this issue.

Types of Employment Tests and Selection Procedures

The landscape of employment testing encompasses a wide array of tools and techniques, many of which are readily administered online. Common examples include:

• Cognitive Tests: These assessments evaluate a range of mental abilities, including reasoning, memory, perceptual speed and accuracy, arithmetic skills, reading comprehension, and knowledge specific to a particular function or job.
• Physical Ability Tests: These tests measure an individual’s physical capacity to perform job-related tasks. They can assess the strength of specific muscle groups as well as overall strength and stamina.
• Sample Job Tasks: This category includes performance tests, simulations, work samples, and realistic job previews. These methods directly assess an applicant’s performance and aptitude on tasks that mirror actual job duties.
• Medical Inquiries and Physical Examinations: These encompass medical assessments, including psychological evaluations, aimed at evaluating an individual’s physical or mental health. It’s crucial to note the specific legal restrictions on when and how these can be used.
• Personality Tests and Integrity Tests: Personality tests gauge the extent to which an individual possesses certain personality traits or dispositions relevant to the workplace, such as dependability, cooperativeness, and safety consciousness. Integrity tests, on the other hand, are designed to predict the likelihood of an individual engaging in counterproductive behaviors like theft or absenteeism.
• Criminal Background Checks: These checks provide employers with information about an applicant’s history of arrests and convictions. The use of this information is subject to legal limitations and considerations of job-relatedness.
• Credit Checks: Credit checks reveal information about an applicant’s credit and financial history. Similar to criminal background checks, their use in employment decisions is regulated.
• Performance Appraisals: These reflect a supervisor’s evaluation of an employee’s job performance. While primarily used for current employees, understanding their potential for bias is important.
• English Proficiency Tests: These tests are designed to determine an individual’s fluency in English, often relevant for jobs requiring strong communication skills.

Governing EEO Laws

• Title VII of the Civil Rights Act of 1964

  • Title VII stands as a cornerstone of anti-discrimination law, prohibiting employment discrimination based on race, color, religion, sex, or national origin.
  • Specifically regarding testing, Title VII explicitly permits the use of employment tests, provided they are not “designed, intended or used to discriminate because of race, color, religion, sex or national origin.” (42 U.S.C. § 2000e-2(h)). Furthermore, Title VII places restrictions on test scoring practices. Employers are legally barred from adjusting scores, using different cutoff scores, or otherwise altering test results based on race, color, religion, sex, or national origin (Id. at §2000e-2(l)).
  • Title VII encompasses two primary forms of discrimination: “disparate treatment” and “disparate impact.”
    • Disparate Treatment: This refers to intentional discrimination based on race, color, religion, sex, or national origin. For example, it is considered disparate treatment if an employer tests the reading ability of African American applicants but not white applicants. Disparate treatment cases often center on questions such as:
      • Were individuals of different races, colors, religions, sexes, or national origins treated differently?
      • Is there evidence of bias, such as discriminatory statements or remarks?
      • What rationale does the employer provide for the differential treatment?
      • Does the evidence suggest that the employer’s stated reason is pretextual, and that the true reason is discrimination based on a protected characteristic?
    • Disparate Impact: This form of discrimination occurs when an employer uses seemingly neutral tests or selection procedures that, in effect, disproportionately exclude individuals based on race, color, religion, sex, or national origin. Such practices are unlawful unless they are proven to be “job-related and consistent with business necessity.” This principle is rooted in the landmark Supreme Court case Griggs v. Duke Power Co., 401 U.S. 424 (1971). Disparate impact cases typically raise the following questions (See 42 U.S.C. § 2000e-2 (k)):
      • Does the employer employ a specific employment practice that creates a disparate impact on the basis of race, color, religion, sex, or national origin? For example, does a mandatory physical agility test disproportionately screen out women? Determining disparate impact often requires statistical analysis.
      • If a disparate impact exists, can the employer demonstrate that the selection procedure is job-related and consistent with business necessity? To meet this standard, the employer must show that the procedure is essential for the safe and efficient performance of the job. The challenged practice must directly relate to the skills required for successful job performance, focusing on specific job-related skills rather than a general assessment of skills.
      • If the employer successfully demonstrates job-relatedness and business necessity, can the party challenging the selection procedure prove that a less discriminatory alternative is available? For instance, is there another test that is equally effective in predicting job performance but does not disproportionately exclude the protected group?
  • In 1978, the EEOC adopted the Uniform Guidelines on Employee Selection Procedures (UGESP) under Title VII (29 C.F.R. Part 1607). UGESP provides comprehensive guidance for employers on evaluating the legality of their tests and selection procedures under Title VII’s disparate impact theory.
    • UGESP outlines three distinct methods for employers to demonstrate that their employment tests and selection criteria are job-related and consistent with business necessity. These methods are collectively known as “test validation,” and UGESP offers detailed instructions for each validation approach.

• Title I of the Americans with Disabilities Act (ADA)

  • Title I of the ADA protects qualified individuals with disabilities from discrimination in employment by private employers and state and local governments.
  • The ADA sets specific parameters for when an employer can require medical examinations or make “disability-related inquiries,” defined as questions likely to elicit information about a disability.
    • During the hiring process, employers are prohibited from asking disability-related questions or requiring medical examinations until after extending a conditional job offer to the applicant (42 U.S.C. §12112 (d)(2)).
    • After a job offer but before the employee starts work, employers may ask disability-related questions and conduct medical examinations, but only if these are applied consistently to all individuals entering the same job category (Id. at § 12112(d)(3)).
    • For current employees, disability-related inquiries or medical examinations are permissible only if they are job-related and consistent with business necessity. For example, an employer may request medical information if they have a reasonable belief, based on objective evidence, that an employee is unable to perform essential job functions or poses a direct threat due to a medical condition. Medical information may also be requested when an employee requests a reasonable accommodation and the disability or need for accommodation is not readily apparent (Id. at § 12112(d)(4)).
  • The ADA further prohibits the following practices:
    • Using employment tests that screen out or tend to screen out individuals with disabilities, unless the test is proven to be job-related and consistent with business necessity (42 U.S.C. § 12112(b)(6)).
    • Failing to administer employment tests in a manner that accurately reflects the skills, aptitude, or other factors the test is intended to measure, rather than reflecting the applicant’s or employee’s disability (Id. at § 12112(b)(7)).
    • Failing to provide reasonable accommodations in test administration to qualified individuals with known physical or mental limitations, unless such accommodation would impose undue hardship on the employer (Id. at § 12112(b)(5)).

• The Age Discrimination in Employment Act (ADEA)

  • The ADEA protects individuals aged 40 and over from age-based discrimination in all aspects of employment, including hiring, promotion, and reductions in force.
  • The ADEA prohibits disparate treatment discrimination based on age, meaning intentional age discrimination. For instance, it is unlawful to administer a physical agility test only to applicants over 50 based on age-related assumptions about physical ability, while not testing younger applicants.
  • The ADEA also prohibits employers from using neutral tests or selection procedures that have a discriminatory impact on individuals aged 40 or older, unless the challenged action is based on a reasonable factor other than age. (Smith v. City of Jackson, 544 U.S. 228 (2005)). Therefore, if a test has a disparate impact based on age, the employer must demonstrate that the test chosen was a reasonable and justifiable measure.

Recent EEOC Litigation and Settlements

Recent EEOC enforcement actions illustrate the practical application of EEO principles in the context of employment testing.

• Title VII and Cognitive Tests: Less Discriminatory Alternative for Cognitive Test with Disparate Impact. In EEOC v. Ford Motor Co. and United Automobile Workers of America, a settlement was reached on behalf of a nationwide class of African Americans who were denied entry into an apprenticeship program due to a cognitive test, the Apprenticeship Training Selection System (ATSS). The ATSS, a written test assessing verbal, numerical, and spatial reasoning for mechanical aptitude, had a statistically significant disparate impact on African American applicants despite being validated in 1991. Although less discriminatory selection procedures were available, Ford continued using the ATSS. The settlement mandated Ford to replace the ATSS with a new selection procedure designed by a jointly selected industrial psychologist to predict job success while minimizing adverse impact. Ford also paid $8.55 million in monetary relief.
• Title VII and Physical Strength Tests: Strength Test Must Be Job-Related and Consistent with Business Necessity If It Disproportionately Excludes Women. EEOC v. Dial Corp. involved a strength test for entry-level production jobs that disproportionately rejected women. Before the test, 46% of hires were women; afterward, only 15%. Dial argued the test reduced worker injuries. However, EEOC expert testimony showed the test was excessively difficult for the job, and injury reduction predated the test, likely due to improved training and job rotation. The Eighth Circuit Court of Appeals upheld the lower court’s finding that Dial’s test violated Title VII under disparate impact theory. (https://www.eeoc.gov/newsroom/appeals-court-upholds-eeoc-sex-discrimination-claim-against-dial)
• ADA and Test Accommodation: Employer Must Provide Reasonable Accommodation on Pre-employment Test for Hourly, Unskilled Manufacturing Jobs. The EEOC settlement in EEOC v. Daimler Chrysler Corp. addressed the needs of applicants with learning disabilities requiring reading accommodations for a pre-employment test for unskilled manufacturing roles. The settlement provided financial relief for 12 individuals and the opportunity to retake the test with a reader. Daimler Chrysler also agreed to provide reasonable accommodations, such as a reader or audiotape, for applicants with documented ADA disabilities needing assistance with this particular test.

Employer Best Practices for Testing and Selection

To ensure fair and legally compliant employment practices, employers should adhere to the following best practices when utilizing tests and selection procedures. This section provides key takeaways for employers looking to leverage employment testing as a valuable career tool fact sheet component of their HR strategy.

• Administer Tests Impartially: Tests and selection procedures must be administered without regard to race, color, national origin, sex, religion, age (40 or older), or disability.
• Ensure Proper Validation: Employers must validate that employment tests and selection procedures are properly validated for the specific positions and intended purposes. The chosen tool must be job-related, and its results must be relevant to the employer’s objective. While vendor-provided validation documentation can be helpful, the ultimate responsibility for ensuring test validity under UGESP rests with the employer.
• Explore Less Discriminatory Alternatives: If a selection procedure disproportionately screens out a protected group, employers should actively investigate whether equally effective alternative procedures exist with less adverse impact. If such alternatives are available, they should be adopted. For example, if a test is causing adverse impact, determine if another test can predict job performance without the same discriminatory effect.
• Maintain Up-to-Date Procedures: To ensure continued predictive accuracy, employers should regularly review and update test specifications and selection procedures to reflect any changes in job requirements.
• Implement Thoughtfully and Knowledgeably: Avoid casual adoption of tests and selection procedures by managers lacking expertise in these areas. While effective when used correctly, these tools should only be implemented with a thorough understanding of their effectiveness, limitations, job appropriateness, and proper administration and scoring methods.
• Seek Further Information: For more in-depth insights into employer and employee experiences with testing, consult the testimonies from the EEOC meeting on testing available on the EEOC website: http://eeoc.gov/eeoc/meetings/archive/5-16-07/index.html.
• General EEO Information: For general information on discrimination under Title VII, the ADA, and the ADEA, visit the EEOC website: https://www.eeoc.gov/laws.

Footnote

¹ The Uniform Guidelines on Employee Selection Procedures (UGESP) were jointly issued by the Departments of Labor and Justice, the EEOC, and the Office of Personnel Management (formerly the Civil Service Commission).