For many jobs, a pre-employment test of physical or cognitive skills can help the company hire only the best applicants. But when companies aren’t careful, those tests can lead to big legal trouble.
The biggest challenge for employers is avoiding claims that a hiring procedure has a “disparate impact” on a certain group. Even a test that doesn’t directly discriminate can get the company in trouble if it rejects a disproportionate number of members in a protected class.
Last year, FedEx had to pay a $55 million settlement after using tests that had a disparate impact on minority applicants.
How can companies stay safe? Tests are fine as long as companies can prove they’re “job related and consistent with business necessity” and no non-discriminatory alternative is available, according to the EEOC.
HR can also take these steps to avoid legal mistakes in pre-employment testing:
- Keep the tests up-to-date — Technology is changing the way many jobs are done, and some skills are no longer necessary. The tests must be changed as the jobs do.
- Don’t always use the same tests for different jobs — Jobs may be similar but not exactly the same. If the necessary skill sets are different, different tests should be used.
- Beware of education requirements — Many companies require a high school diploma for a lot of positions. But lawyers warn against the practice, saying it might be hard to prove a diploma’s necessary for some menial jobs.
- Track statistics — To avoid a disparate impact, companies can keep track of the effect a test has on different applicant groups. Also, some companies hire consultants to have selection procedures professionally validated.
- Don’t put blind faith in a purchased test — When buying pre-made tests, it’s important to get documentation that the test has been validated. But, the EEOC says, companies are still on the hook for making sure those tests don’t create a disparate impact when they’re used.
