Could Your Pre-Employment Testing Cost You Millions in a Lawsuit?

Companies often give their job candidates tests to identify skill gaps or aptitude issues that could prevent them from being the best hire for a job opening. The tests can be physical (such as lifting a box) or written (such as editing skills). But could your seemingly innocent test cost your company millions in a discrimination lawsuit?

That happened to a Buffalo-area dairy cooperative recently in an EEOC lawsuit when the Court ruled in part that a test they gave female job candidates was disproportionately discriminatory towards women. That forced the company to pay out $1.3 million in damages. 

The test was lifting a 50-lb box.

It was ruled that the test directly led to the company hiring 155 men versus only five women between 2008 and 2014. The Court found that many highly qualified women never even made it to a phone interview and that lifting 50 pounds wasn’t a significant part of their daily tasks as there were other, much more important responsibilities.

What can companies test for?

Most pre-employment testing is subject to a series of federal laws, most notably the Uniform Guidelines on Employee Selection Procedures (UGESP), which recognizes the right of employers to use pre-employment tests to make hiring decisions as long as those tests are job-related.

There are many types of tests and selection procedures, including cognitive tests, personality tests, medical examinations, credit checks, and criminal background checks. The New York Times recently pointed out that the personality testing business is incredibly lucrative today, as recent estimates say it’s a $2 billion industry.

The key to an employment test’s legality

Virtually all these pre-employment tests have a logical reason to be given to prospective employees. However, it should have something to do with the person’s ability (or lack thereof) to do the job. For future employees, the important term to remember regarding testing is “predictive validity.”

That means a good test (or another measurement tool) should be able to predict a future outcome. In recruiting and hiring, an outcome can be behavior or level of performance.

The risks of ineffective testing for your company are many:

•             Wasting valuable resources (time and money, especially)

•             Having lower-quality candidates for the jobs you’re trying to fill

•             Possibly eliminating higher-quality candidates incorrectly

•             And worst of all, potential lawsuits

From a legal standpoint, giving bad tests that can eliminate groups of qualified candidates or don’t test for relevant skills opens up your company’s liability to discrimination claims.

Avoid claims of pre-employment discrimination

Pre-employment tests and assessments are often delivered without enough background on why they’re being administered. And many demonstrate little relation to the work that will be performed. For example, giving a math test with many difficult problems when the job doesn’t require the employee to crunch numbers.

Most of the time, it’s unintentional, but it’s still potentially discriminatory. Remember that many of these tests are based on science, and there are specific ways they must be given, or your results may be flawed.

1. Make the entire hiring process fair to EVERY candidate

Treat all candidates fairly and equitably by standardizing your hiring process. If you’re giving assessments, do them under similar circumstances for everyone. That means all tests should be given at the same point in the hiring process. If one candidate receives prep materials or feedback on their performance, do the same for everyone.

Also, this is where reasonable accommodations for candidates who require them come into play, such as extended time for candidates with learning disabilities.

2. Make sure your tests and assessments are relevant

Whether you create the tests yourself or buy them from a vendor, it’s essential that you ensure they are relevant to the job you’re trying to fill. The best way to do this is to give the tests to current employees doing the jobs so they can audit their predictive validity.

3. Tests and assessments are tools, not the final answer.

If you’re unsure how much legal risk your pre-employment testing puts you and your company in, check with your HR department, legal counsel, or a consulting firm specializing in this area.

Keeping these things in mind will help your company avoid a lawsuit. 

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