Ultimate Guide on Legality in Pre-Employment Testing

Hiring new employees is like playing a game of Jenga - every piece you add can make or break the whole tower. And pre-employment testing is one of those crucial pieces. But, here's the catch - you don't want to accidentally knock over the tower by breaking the law. That's why we're here to help you build a solid foundation with our ultimate guide to the legality of pre-employment testing.

We'll answer all your burning questions, like "What are the legal guidelines and laws that govern pre-employment testing?" and "How do you determine if the test you're handing out to candidates does not violate any laws?”. In this ultimate guide, we'll dive into the legality of pre-employment testing and provide you with all the information you need to make informed decisions when it comes to testing potential hires. Let's get started!

General legal guidelines for pre-employment tests

Let's tackle the very first question in this section. Is it legal to conduct pre-employment tests?

Yes, it is. However, the "yes" is conditional – the test must only include topics relevant to the job. This criterion is a generic one that must hold true irrespective of the type of pre-employment test.

Here are the general guidelines to consider for every test:

Job relevance

The test should be directly related to the skills, knowledge, and abilities required for the job.

To be considered job-relevant, a test should be directly related to the specific tasks and responsibilities of the job. For example, if the job involves handling customer inquiries by phone, a relevant test might measure an individual's communication skills and ability to solve problems over the phone.

Using tests not directly related to the job can be unfair to applicants and may result in the exclusion of qualified candidates. It can also lead to legal challenges, as tests that are not job-relevant may be seen as discriminatory or in violation of federal and state employment laws.

Leprino Foods ended up paying $550,000 to applicants as they faced discrimination charges which claimed that the test they provided was not job-relevant.

As you can see, when designing a pre-employment test, it is essential that you carefully consider the specific skills and abilities necessary for success on the job and design the test to measure those factors. This can help ensure that the test is fair, valid, and legally compliant and also helps you in hiring the right person for the job role.

Fairness and non-discrimination

The test should not disproportionately exclude certain groups of people, such as those with disabilities or individuals from certain racial or ethnic groups.

Under federal and state employment laws, it is illegal for employers to discriminate against individuals based on their race, color, religion, sex, national origin, age, disability, or genetic information. This means that you must administer employment tests and assign a score to the candidates in a way that does not disproportionately exclude individuals from certain protected groups unless there is a legitimate business reason for doing so.

To ensure fairness and non-discrimination, you should consider the following:

1. Test content: The test should be directly related to the skills, knowledge, and abilities required for the job and should not include questions or tasks that are unrelated or biased against certain groups of people.
2. Test administration: The test should be administered consistently to all applicants and must provide any accommodations for individuals with disabilities in a fair and consistent manner.
3. Scoring: The test should be scored consistently and objectively, minimising any subjectivity involved.

Not following these rules and guidelines can have a detrimental impact on your business as you expose yourself to potential legal issues.

EEOC filed a lawsuit against Kaplan, alleging that its pre-employment tests for admission representatives had a disparate impact on African American and Hispanic applicants.

However, by considering these factors, you can help ensure that your pre-employment tests are fair and do not disproportionately exclude certain groups of people.

Validity

The test should accurately measure the skills, knowledge, and abilities that are relevant to the job.

Validity of a pre-employment test refers to the extent to which a test accurately measures what it is intended to measure. A test is considered valid if it can accurately predict an individual's job performance.

The other key aspect that you must prioritize along with the validity of a test is the reliability of the test.

Reliability

The test should produce consistent results over time and across different administrations.

Reliability measures the degree to which a test produces consistent and stable results when administered repeatedly to the same individuals.

To ensure both the validity and reliability of a pre-employment test, you should ensure that the test is developed and validated using established psychological and statistical principles and should be subject to ongoing review and evaluation to ensure its ongoing validity and reliability.

Overall reliability and validity form the pillars of a good, ethical and legal pre-employment test.

Legal compliance

The test should comply with all relevant federal and state laws, including the Americans with Disabilities Act (ADA) and Title VII of the Civil Rights Act of 1964.

You must abide by the most basic laws when creating pre-employment tests. In the case of failing to follow legal compliance, you open yourself to several issues, both from applicants as well as employees. This can cost you a lot of money and damage your business reputation.

However, we shall go over the laws that govern the design of pre-employment tests to a much deeper extent in a subsequent section.

Legal guidelines for specific pre-employment tests

As we mentioned before, most pre-employment tests must follow the same guidelines to ensure that the tests do the job they are supposed to. However, there are a few specific guidelines for certain tests that you must remember before using them.

Coding tests

There are a few specific considerations that you should take into account when designing a pre-employment coding test:

1. Test content: Include questions or tasks that are directly related to the coding skills and knowledge required for the job. This may include tasks that require the applicant to write code to solve a specific problem or to implement a particular algorithm.
2. Testing environment: You must provide a standardized coding platform and set specific time limits for completing the test and it should be consistent for all applicants.
3. Scoring: You must minimize any subjectivity that might be introduced by using automated tools to evaluate the accuracy and efficiency of the code that is written by the applicant.

Personality tests

There are two key aspects to consider while conducting personality tests:

1. Transparency: The test should be clearly communicated to applicants, and the applicants should provide informed consent before taking the test. This includes providing information about the content and purpose of the personality test, as well as how the results will be used in the hiring process.
2. Confidentiality: Due to the fact that personality tests reveal an individual's personality, the information must be held confidential. The test should be administered and scored to maintain the confidentiality of the applicants' personal and test-related information.

On an ethical front, these results and information obtained from the personality tests must be used solely for hiring and job-related purposes. Despite applicants providing consent before taking the test, it does not give you leeway to use this information as you like.

EEOC laws in pre-employment testing

The Equal Employment Opportunity Commission (EEOC) enforces several laws that relate to pre-employment testing, including:

Title VII of the Civil Rights Act of 1964

Title VII of the Civil Rights Act of 1964 prohibits employment discrimination on the basis of race, color, religion, sex, or national origin. This means that employment tests must be relevant to the job in question and cannot be used to disproportionately exclude certain groups of people.

The Americans with Disabilities Act (ADA)

The ADA prohibits employers from requiring applicants to undergo medical examinations or from using selection criteria that disproportionately exclude people with disabilities. It also requires you to provide reasonable accommodations for individuals with disabilities, unless doing so would pose an undue hardship.

The Age Discrimination in Employment Act (ADEA)

This law prohibits employment discrimination against individuals who are 40 years of age or older. Under the ADEA, it is illegal for an employer to discriminate against an individual in any aspect of employment, including hiring, promotion, termination, compensation, or any other term or condition of employment, on the basis of their age.

58% of employees in their fifties or above have noticed age bias first hand.

Source: Adaface

The EEOC also has guidelines that we explored in the very first section on the use of pre-employment tests, stating that tests must be job-related and consistent with business necessity, and must not be used to discriminate against protected groups.

Benefits of pre-employment tests from a legal standpoint

Going through all the above laws and guidelines, it does look like using pre-employment tests in your hiring process exposes you to a lot of potentially legal issues. However, the opposite of this is true.

In federal cases involving hiring, traditional recruitment techniques such as interviews are responsible for 63% of them while pre-employment tests make up for only 18% of the cases.

As you can see, traditional recruitment techniques like interviews can result in you facing more legal issues as opposed to incorporating pre-employment tests into your hiring process, which can provide you with significant benefits.

Compliance with employment laws

Pre-employment tests can help you comply with federal and state employment laws, such as the ADA and Title VII of the Civil Rights Act, by ensuring that the tests are fair, valid, and legally compliant. This removes the headache of you having to ensure that your hiring process abides by the required guidelines.

Reduction of discrimination claims

When your hiring process involves human interaction at every stage, you introduce a lot of conscious and unconscious bias into the process. This can cause discrimination claims against your business.

However, it not only reduces discrimination claims but also improves diversity of the team which can result in more efficiency and varied viewpoints.

FCB Worldwide Inc., a New York City-based global advertising network implemented a blind hiring system which resulted in 18% more women in the workforce and a 39% increase in diverse applicants.

With pre-employment tests, you can help reduce the risk of discrimination claims by ensuring that the hiring process is based on objective criteria and does not disproportionately exclude certain groups of people.

Improved hiring decisions

In the end, the quality of hire is what matters for your business. This is what pre-employment tests excel at. They can provide valuable information about an applicant's skills, knowledge, and abilities, which can help you make more informed hiring decisions.

Increased employee productivity

The company which has become a synonym for photocopy, Xerox, saw a 20% decrease in turnover once they began implementing pre-employment assessments into their hiring process.

With pre-employment tests, you do not need your employees to conduct tests and handle every interview. It helps identify individuals who are well-suited for the job, thus increasing employee productivity and reducing the risk of employee turnover.

Adverse impact of disregarding legal guidelines

Just as how abiding by legal guidelines and laws in pre-employment testing can be largely beneficial for your organization, disregarding them can be detrimental to your company and the bigger the size of your company the more adverse the impact. Here are a few negative impacts of disregarding legal guidelines during your pre-employment testing:

Discrimination claims

If an employment test disproportionately excludes certain groups of people or is used to discriminate against applicants on the basis of their race, color, religion, sex, national origin, age, disability, or genetic information, you could face discrimination claims under federal and state employment laws.

Legal action

If you are found to be in violation of employment laws, you could face legal action from the Equal Employment Opportunity Commission (EEOC) or other regulatory agencies. This could result in fines, damages, and other legal penalties.

Reputational damage

Violation of employment laws may also cause negative publicity and damage to the reputation of your business, which could affect your ability to attract and retain talent.

Poor hiring decisions

If you disregard the legality involved in pre-employment tests, you may make poor hiring decisions, which could lead to low employee productivity and high employee turnover.

Final notes

Reasons for not using pre-employment tests, Source

As shown, a survey of over 300 HR professionals revealed that increased legal exposure ranks last in the list of reasons why HR professionals do not use pre-employment tests.

So, if you are on the fence about whether or not to use pre-employment tests due to the possibility that you might be exposed to legal issues, you are missing one key lesson – legal guidelines and laws in pre-employment testing not only help you avoid legal challenges but at the same time helps in making better hiring decisions for your organization.