The document discusses how a chemical manufacturer had to pay $175,000 in back pay and interest after its pre-employment test was found to disproportionately screen out African American applicants. The employer's test was not sufficiently validated to prove it was predictive of job performance. Under EEOC guidelines, employers must validate any selection procedures, like tests or interviews, that have an adverse impact on protected groups to avoid claims of discrimination. Validating means demonstrating the selection procedure is representative of important job skills through statistical analysis or subject matter expertise. Failure to validate procedures that adversely impact hiring can result in legal and financial consequences.

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Avoid Inadvertent Hiring
Discrimination

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The intent to discriminate might not have been a factor. But an East Coast
chemical manufacturer will still have to pay $175,000 in back pay and interest
to 660 African-American job applicants, who were rejected for entry-level jobs
at one of their locations over a one-year period.
The problem was a failure to satisfy the federal Uniform Guidelines on
Employee Selection Procedures. In particular, the company's pre-employment
test was deemed to disproportionately screen out a protected group based on
criteria that weren't sufficiently linked to the skills required for the jobs the
company was filling.
The original guidelines (updated over the years) were issued by the Equal
Employment Opportunity Commission (EEOC) back in 1978, six years after the
enactment of the Equal Employment Opportunity Act. While the basic rules
aren't new, they're subject to constant interpretation in each employment
scenario, and in the case of the chemical manufacturer, the employer's
interpretation didn't hold up. The rules seek to eliminate aspects of hiring
systems that could be discriminatory by race, gender, religion or national
origin.

3. "All Selection Procedures"
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The EEOC guidance doesn't apply to pre-employment tests, but "all selection
procedures used to make employment decisions, including interviews, review
of experience or education from application forms, work samples, physical
requirements, and evaluations of performance," according to the EEOC.

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A key principle is the importance of using "validated" testing systems (more
on that below). Technically, you're not required to use tests that have been
prevalidated as nondiscriminatory. However, if you're accused of
discriminating and can't prove the validity of your testing methods at that
time, you'll generally lose the case.
Hiring results that raise red flags are those that lead to a "substantially
different rate of selection." The same applies to the processes of promotion,
retention or any other positive employment action. The EEOC defines that as
when the selection rate for any race, sex or ethnic group is less than 80% of
that for the group with the highest selection rate.
So, for example, if 50% of men pass a pre-employment test and are hired, but
only 30% of women pass the test and are hired, the alarm bells sound. In this
case, the hiring rate for women was only 30% divided by 50%, which equals
60% of the hiring rate for men. The women's pass rate would have to be at
least 40% to be within the range acceptable to the EEOC.

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Note: You don't need to analyze testing results for every protected group. An
exception is made for groups that represent less than 2% of the local work
force. That low threshold might be applicable to the "national origin"
category, if a relatively obscure country is involved.
Failing the "substantially different rate of selection" test isn't, on its own,
proof of illegal discrimination, however. The EEOC describes it as "a numerical
basis for drawing an initial inference and for requiring additional information."
This is where test validation comes in — basically showing that the test gives
an accurate measurement of a job candidate's ability to be successful in the
position sought.

6. Validating Hiring Tests
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The Uniform Guidelines draw upon the American Psychological Association's
list of "validity strategies:"
• Criterion-related validity: A statistical demonstration of a relationship
between scores on a selection procedure, and job performance of a
sample of workers,
• Content validity: A demonstration that the content of a selection
procedure is representative of important aspects of the job, and
• Construct validity: A demonstration that a selection procedure measures
a human trait (for example, creativity), and that the trait is essential for
successful job performance.

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If you're accused of discriminatory hiring practices and the EEOC decides to
investigate, these are the two steps the investigator typically will take to
assess the situation. The examiner will:
1. Measure the extent to which each element of your selection process has
an adverse impact on members of protected groups, and
2. Ask you for evidence of the validity of any selection mechanism that has
been shown to have an adverse impact.
Unfortunately, you can't give a trial run to validate evidence to the EEOC in
advance to gain assurance whether it will pass muster if you face an
accusation of discrimination. During an examination, "validity evidence will
not be reviewed without evidence of how the selection procedure is used and
what impact its use has on various race, sex and ethnic groups," according to
the EEOC.

8. "Rational" Doesn't Suffice
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Also, it's not enough to demonstrate a "rational relationship between a
selection procedure and the job sufficient to meet the validation
requirements of the guidelines," the EEOC warns. Nor can you present written
or oral assertions of validity from any expert. It all comes down to a validity
study that the EEOC will "judge on its own merits."

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One of the pre-employment tests used by the chemical manufacturer
measured reading, math, listening, the ability to locate information and
teamwork. In spite of assertions by the employer that the test accurately
predicts a job applicant's future performance for the job at hand, the EEOC
wasn't convinced.
The bottom line: Before choosing, let alone trying to validate an employment
test, determine what knowledge, skills and abilities are essential for the job,
to avoid inappropriately screening out applicants. Also, be sure you maintain
records of the demographic features of your job applicants to make it possible
for you (and perhaps the EEOC) to determine whether your hiring practices
are having a disproportionate negative impact on protected groups.
Industrial psychologists and other job experts specialize in these issues, and
can help you to avoid falling into any employment discrimination traps.

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