Multiple Choices: Compliance Considerations in the Shifting Landscape of Pre-Employment Testing

by Foley & Lardner LLP

In recent years, the landscape of pre-hire employment screening tests has rapidly evolved. Employers throughout the U.S. are facing shrinking applicant pools as the labor market tightens. As a result, many employers are now looking at personality and psychological tests to find the best fitting applicants. While the individual tests may vary, these tests often involve a series of questions requiring job seekers to “agree” or “disagree” with certain statements, and then generate a score based on their answers.

As we have previously detailed, any pre-employment testing can be rife with legal risk and, given the potential for Equal Employment Opportunity Commission (EEOC) enforcement actions and class action lawsuits, employers who implement personality or psychological testing as part of their employee hiring process should ensure that they are not buying a class action discrimination lawsuit.

Legal Background

The use of personality and psychological tests in the hiring process can invoke a number of state and federal laws, including the Americans with Disabilities Act (ADA) and equal employment opportunity laws, such as Title VII, the Age Discrimination in Employment Act (ADEA), and the Genetic Information Non-Discrimination Act, among others.

With regard to the ADA, a test that is administered before a conditional offer of employment is given would violate the ADA if it constitutes a “medical examination.” Under the ADA, a medical examination is one that seeks information regarding an individual’s physical or mental impairments. For example, a psychological test that measures factors such as honesty, tastes, and habits would not constitute a medical test. By contrast, a test that measures whether the individual has anxiety, depression, or certain compulsive orders would likely constitute a medical test and cannot be administered before a conditional job offer is extended. Even if the test is administered after a conditional offer, it must be administered to all individuals entering the same job category and must be job-related and consistent with business necessity. And even then, if an employment offer is revoked following a medical examination, the employer must demonstrate that the reason for the rejection is job-related and consistent with business necessity.

However, the more prominent concerns associated with personality and psychological testing in the hiring process relate to the various Equal Employment Opportunity (EEO) laws, and whether a test has an adverse or discriminatory impact on a protected class of individuals. An otherwise neutral personality or psychology test would violate EEO laws if it has the effect of adversely impacting a protected class of individuals. Historically, many such tests have been shown to have an adverse statistical impact. If the test has an adverse impact, the employer has the burden to show that the test is job-related and consistent with business necessity.

Important Compliance Measures

Consult the Uniform Guidelines on Employee Selection Procedures. The Uniform Guidelines on Employee Selection Procedures (UGESP) provides uniform and comprehensive guidance to employers about how to determine if their tests are lawful under the disparate impact analysis, and outlines methods that employers may use to show that their employment tests are job-related and consistent with business necessity. The EEOC has published a comprehensive Q&A guide on the UGESP to help employers better understand the intricacies involved in the UGESP.

Tailor the method of testing to the particular position the applicant is seeking. Any test should accurately measure skills necessary to perform a specific position and predict performance in that position. To ensure that they are implementing an appropriate test, employers should identify the skills and abilities most critical to success in the position and direct their focus to those factors in the testing process.

Be wary of a “one size fits all” test. Oftentimes, companies that design and administer pre-hire personality and psychological tests are not experts on a specific employer’s workplace and may not know the intricacies of the company and the skills and traits that will lead to success in particular positions. If a test publisher makes promises that their tests do not discriminate, ask them to provide written guarantees. Employers should therefore consider working with legal counsel and outside consultants and experts to ensure that a test is designed and administered in a manner that is tailored to the specific positions within their organizations.

Monitor the use of the tests. Continually assess job descriptions and requirements to ensure that a test remains predictive of job success – the nature of a particular position may evolve over time, and a test that once predicted success at a high rate may not do so as the particular position evolves.

Do not become overly reliant on testing. Using pre-hire testing may seem like an effective way to narrow a pool of job applicants, especially when there are hundreds, if not thousands, of applicants for only a handful of positions. While pre-hire testing can indeed be a useful tool in these instances, employers should continue to use interviews and references to evaluate whether a particular candidate is a good fit for the position.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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