Pre-Employment Skills Testing and the Law
Karen VanKampen
April 2009

Table of Contents
|Introduction…………………………………………………………………………………. | |
|The Laws That Apply to Pre-Employment Skills Testing………………………………….. | |
|The Benefits in Pre-Employment Skills Testing……………………………………………. | |
|The Controversy / Risk in Pre-Employment Skills Testing………………………………… | |
|Cases / Examples…………………………………………………………………………… | |
|Recommendations………………………………………………………………………….. | |
|Bibliography……………………………………………………………………………….. | |

Introduction
When seeking the best candidates for open job positions, employers (private and public sector) use a variety of legal means to screen and select viable candidates. Many employers use tests to identify the most suitable candidate to perform the job. The types of tests used by employers may include skills tests, psychological tests, strength tests, medical tests, personality tests and drug tests.
There is much controversy on the use of employment testing because, although not the ethical organizations’ intention, the tests may be viewed as and proven to be discriminatory. Therefore, employers must understand the laws that apply and take special care in selecting the type of tests it uses, the content of those tests and the processes applied to compare results and make final candidate selections.
This report focuses mainly on skills testing of job candidates. It will not focus on psychological tests, strength tests, medical tests, personality tests and drug tests but these types of tests may be mentioned in this report as a comparison or to provide examples of how the law surrounding employment tests, in general, is applied.
From this research on the various laws, benefits, risks and cases associated with pre-employment skills tests, recommendations for employers are provided so that they remain legal and precise in their search for the best job candidates.
The Laws That Apply to Pre-Employment Skills Testing
Skills tests provide a very effective method to identify which job candidates are most qualified for the job and, thus, will be most successful in that job. However, employers need to be cognizant of the Equal Employment Opportunity (EEO) laws that apply to this type of pre-employment testing.
These laws include: • Title VII of the Civil Rights Act of 1964 (Title VII) • Age Discrimination in Employment Act of 1967 (ADEA) • Americans with Disabilities Act of 1990 (ADA)
Title VII
Title VII prohibits employment discrimination based on race, color, religion, sex or national origin. Title VII allows employment tests only if their intent and design is not to discriminate job candidates. Additionally, Title VII does not permit employers to alter or score test results based on race, color, religion, sex or origin.
In Title VII, the terms disparate treatment and disparate impact are introduced. They are much discussed topics where employment tests are concerned, especially disparate impact.
Disparate treatment is defined as “the use of criterion in making an employment decision by treating some people less favorably than others. An example would be a test of job candidates’ articulation skills whereby the skills test asks the candidates to explain the rules of American football. This may be ruled as disparate treatment based on race, sex or national origin because: • It may be argued that some races are more knowledgeable and therefore articulate about American football. • It may be argued that male candidates have an advantage over female candidates because more males are intimately knowledgeable about football than females • While well-known and played in the United States, candidates from other countries do not have as much knowledge about it as their American counterparts.
Disparate impact is defined as “adopting ‘neutral’ rules that adversely affect a protected class and that are not justified as being necessary to the business. The proof of business necessity must provide a significant relationship to successful performance of the job. If for example, an employer tests the candidate’s diction skills, it may be argued whether diction is a business necessity for that particular job position. This type of test would raise questions where race, national origin and physical disabilities are concerned. Candidates with even a slight accent may immediately be disqualified as well as those with a speech disability. There would have to be concrete evidence that the level of diction tested for is a business necessity for that job position. Additionally, multiple choice tests may be considered discriminatory under disparate impact because these types of tests reflect test-taking ability rather than actual job skills.
Age Discrimination in Employment Act of 1967 (ADEA)
The ADEA prohibits discrimination based on age. Employers are not allowed to make age-based employment decisions. Disparate treatment and disparate impact also apply to age discrimination. For example, an employer may not test only applicants who appear to be over a certain age and not testing those who appear younger than a certain age.
Americans with Disabilities Act of 1990 (ADA)
The ADA prohibits discrimination based on disabilities and specifies when an employer is allowed or not allowed to ask questions that have to do with disabilities. Employers cannot require medical examinations until after a job offer is made, with conditions specified. The ADA does not allow skills tests that intend to screen out candidates with a disability or a class of candidates with disabilities unless the employer can prove that it is job-related and has business necessity.
In other words, the skills test must accurately measure job candidate skills and not their disabilities. Taking the previous example of testing job candidates on their diction skills, this skills test may be questionable under ADA unless it can be proven that diction is a critical component of the job. An employer highly dependent on telephone sales and hiring telemarketers may be able to argue business necessity whereas a hospital employer hiring nurses may not.

The Benefits in Pre-Employment Skills Testing
There are many benefits that both job candidates and employers gain through the use of valid and legal pre-employment skills tests. These include:
| | | |
|For the Employer: | |For the Job Candidate: |
| | | |
|A way to make a good hiring decision and improve its chances of | |A clearer picture of what the job requires |
|hiring a candidate that meets job requirements | | |
| | |An opportunity to better assess whether the job and/or |
|A method of objectively assessing candidate job and organizational | |organization is a good fit for the candidate |
|fit | | |
| | |An opportunity to interact with others in the organization|
|Reduced turnover by hiring a candidate who has a better sense of the| |other than the interviewers |
|organization and vice versa | | |
| | |Potential foresight into future promotion or other job |
|Higher productivity because the candidate hired has the skills and | |opportunities with the organization |
|knowledge required to perform well | | |
| | |Assurance that objective criteria are being used to |
|The ability to put its best foot forward in presenting itself as a | |compare candidates and make employment decisions |
|fair, positive, professional organization | | |
| | | |
|Lower training costs | | |

In situations where I have personally had the opportunity to experience pre-employment skills testing in action, job candidates who were both selected and not selected for the job positions unanimously reported that they not only found the skills test to give them better insight into the job and organization but that they actually enjoyed the experience and learned something about themselves and what they were looking for in a job and employer.
Employers have also found pre-employment skills tests to be helpful in selecting the best candidates. At the same time, employers also found that the hiring process took longer and involved more resources. Without a doubt, skills tests are more time and labor intensive than strictly using an interview process. Because of the time and labor intensity, employers need to think through the cost/benefit of implementing a skills test for an open position. The benefit may outweigh the costs for some jobs and not for others.

The Controversy / Risk in Pre-Employment Skills Testing
Although the benefits of pre-employment skills tests are great, the risks may be just as great. In addition to the obvious and already discussed legal implications having to do with discrimination per Title VII, ADA and ADEA, there are also the issues with validity. Valid skills tests do not discriminate and they do produce the results of a quality hire for both the organization and job candidate. Invalid skills tests either are discriminatory, result in poor hiring decisions or both.
Validity
The validity of a pre-employment skills test - or any other selection procedure – needs to be determined prior to implementation. The standards used to test and compare candidates need to mirror what is expected on the job per written documents such as job descriptions, competency and skill listings, expectations and job performance objectives. The measurement of how well a candidate performs on the skills test should also mirror the job as closely as possible, taking into account that a skills test may not be able to totally simulate an on-the-job situation.
For example, if the skills test for a sales rep involves conducting a cold call to a customer, the person acting as the customer may not necessarily have the exact mindset of a real customer. However, the script used by the person acting as the customer must be used in the same exact manner for each candidate. Parts of the script should not be excluded and new parts included for some candidates and not others.
The other aspect of assessing the skills test for validity is ensuring that the test is clearly associated with critical job skills. It must be representative of the critical aspects of the job. In the sales rep example, the skills test should include situation to measure how fast the candidate can dial the phone. Quick dialing is not a critical skill in this case while cold calling is.
Scoring and False Negatives
There is much controversy about the scoring of pre-employment skills tests due to the potential of false negatives. A false negative occurs when “an applicant fails the (skills) test even though the applicant is able to perform the job.” The existence of a false negative undermines the trustworthiness of the test. If job incumbents who perform well on the job take the test and fail, questions arise about how the test is scored and how candidates are assessed. Likewise, if one candidate does well on the test and all others fail, it should be questioned whether the candidate scored well due to pure luck or because that candidate was over-qualified. Both situations produce false negatives and disqualify candidates who would otherwise be very viable hires. Tests that produce false negatives produce bias or unfairness and would not hold up in a court of law.
It is important, then, for employers to use due diligence in validating skills tests before implementing them either to hire.
Relationship to Job
As discussed throughout this report, it is highly critical that any pre-employment test, whether it be a skills test or other type of candidate hiring tool, represent as close to a mirror image of the critical components of the job as much as possible. If there is any question as to the relationship a test or any part of a test has to the major aspects of a job, the employer needs to think twice about its use or design. Besides the fact that lack of a direct link to the job is unlawful, there is high probability that the test will not provide the employer with the hiring results it had hoped for. The employer may hire for one set of skills based on the test but really need a similar but different set of skills to perform the job. Time may also be a factor here. If the skill requirements for a job changes over time, and the skills test has not been updated to reflect new or changed requirements, the employer may find that not only is the test illegal but that it also no longer produces the quality hires that it used to.

Cases / Examples
Several landmark cases exist that demonstrate how employers have not abided by the law. These cases demonstrate several of the issues discussed thus far.
EEOC v. Dial Corp., 2004-2006 – Disparate Impact
In this case, Dial Corporation used a “work tolerance test” for a job that was physically demanding. The job required lifting a 35 pound rod of sausages 65 inches up. The test required job candidates to carry 35 pound weights back and forth while lifting them 35-65 inches high. On the surface, the test seemed to match the job requirements. However, the courts found that the test was actually more difficult than the job.
Dial argued that the reason for the demanding test was to reduce on-the-job injuries and make sure that employees were well-suited for the demands of the job. Dial provided proof that they experienced a reduction in on-the-job injuries after implementing this skills test for strength. The court rejected this and found that the overall reductions in injuries were more likely related to other safety initiatives implemented at the same time.
Additionally, when the case arose, it was found that over 95% of the male applicants passed the test while fewer than 40% of female applicants passed. Prior to test implementation, almost half of those hired into the job were females. It was found that the females were no more likely to suffer job injuries than their male counterparts.
The plaintiffs, all women, reported that they met all other job requirements and Dial made conditional job offers to them prior to the test. The condition was passing the “work tolerance test.” Because of height, women failed the test because they had to lift the 35 pound weights while standing on their toes in order to meet the 65 inch height requirement. Men on the other hand did not have this issue.
In the end, the courts decided that the “work tolerance test” used by Dial discriminated against female job candidates; it had disparate impact against women. It also found that the test did not reasonably mirror job requirements nor help to reduce the number of job injuries suffered by unqualified hires.
Soroka v. Dayton Hudson Corp. dba Target Stores, 1989-1992 – Disparate Impact
In this case, a psychological test was used for the purposes of selecting viable candidates for security guard positions at 113 Target Stores in California. Target implemented the tests because emotional characteristics were critical to the security guard position. The tests were developed and scientifically validated and correlated to the job by psychological experts.
The plaintiff argued that the test questions were not job related and provide into very private thoughts and feelings that had no bearing on the job. Examples of test questions (true and false) included, “I believe my sins are unpardonable” and “evil spirits possess me sometimes.”
Target needed to prove that these types of questions were justified due to job requirements. The court found that while it was important for Target to hire emotionally stable individuals into this job, it was not clear how religious beliefs and sexual preferences had any bearing.
In this case, the courts’ stance on psychological testing was also discussed. Though different from skills testing, it is important to point out that “psychological testing designed for clinical and diagnostic use should not be used” as clear indications of future job performance. Consistently, the courts do not favor the use of these types of tests for business purposes.
Griggs v. Duke Power Company, 1970-1971 – Disparate Treatment
In order to be promoted into a particular job or category of job at Duke Power, incumbent candidates were required to pass two aptitude tests and hold a high school diploma. The plaintiffs argued that Duke’s requirement for these jobs discriminated against African-American employees and was in violation of Title VII.
Initially, the courts found no discriminatory practices. However, the ruling was overturned because it found that there were an unequal number of African-American employees that were prevented from being promoted or hired for these higher-paying jobs. It was proven that a high school diploma was not required for performance of these jobs nor did the tests directly relate to or indicate a candidate’s ability to learn or perform these jobs. The courts ruled that Duke employed an unnoticeable, but illegal, method of giving job preferences to its traditionally white employees.
EEOC v. Ford Motor Co. and United Automobile Workers of America, 1997-2005 – Disparate Impact
In this case, plaintiffs reported that current and former African-American employees of Ford Motor were not placed on a Ford apprenticeship eligibility list. Applicants for the apprenticeship program were required to complete the Apprentice Training Selection System test. The apprenticeship program was for positions that required electrical, millwright, plumber, pipefitter, machine repair and tool and die skills. The test was cognitive in nature and tested for verbal, numerical and spatial reasoning. It was argued by Ford and UAW that the test questions related specifically to mechanical ability.
The courts found that the test was discriminatory towards African-American applicants and that the test did not comply with the Uniform Guidelines on Employee Selection Procedures because it tested for skills that were not critical to the job types related to the apprenticeship program.
As a result, Ford had to stop using the test and contract organizational psychologist experts to develop and validate a new test that related to the basic skills required for entry into the apprenticeship program.
Recommendations
Listed below are several recommendations for employers to take into account when considering the use of or implementing pre-employment skills tests.
1. Administer the same test to your “short list” of job candidates. For several reasons, employers should only administer a skills test on the screened and viable candidates. All candidates in the running for the job must be given the same test. Employers cannot test one viable candidate and not the other. It also is important to work with a screened and shortened list of candidates. If a job posting brings in one thousand resumes, it is not feasible or practical to test each of the one thousand applicants. Besides, in a hiring process without a skills test, the employer would still shorten the list through standard resume and phone screen practices, prior to conducting more in-depth, face to face interviews. Working with the short list of candidates reduces time, resources and risk.
2. Validate skills tests. Using incumbents in the job for which the test is designed, ensure that the scoring and hiring decisions are in line with the requirements of those who already perform the job well. Also validate it to ensure that it truly is the best method for predicting job performance.
3. Ensure that managers are not informally implementing skills tests. Without little knowledge of the legal implications and how to validate tests, managers’ well-intended actions could open the organization up to discriminatory violations and poor hiring decisions.
4. Obtain legal review of the test prior to implementation. It is up to employers to ensure it adheres to Title VII, ADA and ADEA and that it avoids disparate treatment and disparate impact. It is critical to have skills tests – and any other candidate selection tests – reviewed by their legal department or outside legal counsel.
5. Conduct a cost/benefit analysis. To balance the decision on whether to use a skills test for hiring, the hiring manager(s) should conduct a cost/benefit analysis. This is to ensure that the benefits (best candidate selection) outweigh the risks (discrimination) and costs (time and resources) of the test.
6. Ensure that there are accommodations for disabilities. Employers needs to ensure that the test is neutral to a disability and does not place the disabled at a disadvantage. When a disability is involved in testing a candidate, fair accommodation must be made available to the candidate.

It is evident that there are many important issues to consider when deciding whether to use a skills test as a tool for selecting the best candidate for the open position. The benefits must outweigh the risks and costs. In 2000, the American Management Association reported that 69% of firms surveyed use pre-employment skills tests to make hiring decisions. After September 11, it is reported that more firms are using skills tests, especially in hiring security positions. These employers have found the benefits to far outweigh the risks and have implemented measures to remove discrimination from the process.
From my experience and research, pre-employment skills tests are a viable method for identifying the best candidate for the job. Employers must implement the recommendations must to ensure they receive the hiring results they desired and to remove as much risk as possible.
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