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Chapter 2: Understanding the Legal Context of Assessment-Employment Laws and Regulations with Implications for Assessment

The number of laws and regulations governing the employment process has increased over the past four decades. Many of these laws and regulations have important implications for conducting employment assessment. This chapter discusses what you should do to make your practices consistent with legal, professional, and ethical standards.

Chapter Highlights

  1. Title VII of the Civil Rights Act (CRA) of 1964, as amended in 1972; Tower Amendment to Title VII
  2. Age Discrimination in Employment Act of 1967 (ADEA)
  3. Equal Employment Opportunity Commission (EEOC) - 1972
  4. Uniform Guidelines on Employee Selection Procedures - 1978; adverse or disparate impact, approaches to determine existence of adverse impact, four-fifths rule, job-relatedness, business necessity, biased assessment procedures
  5. Title I of the Civil Rights Act (CRA) of 1991
  6. Americans with Disabilities Act (ADA) - 1990
  7. Record keeping of adverse impact and job-relatedness of tests
  8. The Standards for Educational and Psychological Testing - 1985; The Principles for the Validation and Use of Personnel Selection Procedures - 1987
  9. Relationship between federal, state, and local employment laws.
Principles of Assessment Discussed: Use only assessment instruments that are unbiased and fair to all groups.
The general purpose of employment laws and regulations is to prohibit unfair discrimination in employment and provide equal employment opportunity for all. Unfair discrimination occurs when employment decisions are based on race, sex, religion, ethnicity, age, or disability rather than on job-relevant knowledge, skills, abilities, and other characteristics. Employment practices that unfairly discriminate against people are called unlawful or discriminatory employment practices.

The summaries of the laws and regulations in this chapter focus on their impact on employment testing and assessment. Before you institute any policies based on these laws and regulations, read the specific laws carefully, and consult with your legal advisors regarding the implications for your particular assessment program.

Title VII of the Civil Rights Act (CRA) of 1964 (as amended in 1972); Tower Amendment to Title VII

Title VII is landmark legislation that prohibits unfair discrimination in all terms and conditions of employment based on race, color, religion, sex, or national origin. Other subsequent legislation, for example, ADEA and ADA, has added age and disability, respectively, to this list. Women and men, people age 40 and older, people with disabilities, and people belonging to a racial, religious, or ethnic group are protected under Title VII and other employment laws. Individuals in these categories are referred to as members of a protected group. The employment practices covered by this law include the following:Employers having 15 or more employees, employment agencies, and labor unions are subject to this law.

The Tower Amendment to this act stipulates that professionally developed workplace tests can be used to make employment decisions. However, only instruments that do not discriminate against any protected group can be used. Use only tests developed by experts who have demonstrated qualifications in this area.

Age Discrimination in Employment Act of 1967 (ADEA)

This Act prohibits discrimination against employees or applicants age 40 or older in all aspects of the employment process. Individuals in this group must be provided equal employment opportunity; discrimination in testing and assessment is prohibited. If an older worker charges discrimination under the ADEA, the employer may defend the practice if it can be shown that the job requirement is a matter of business necessity. Employers must have documented support for the argument they use as a defense.

ADEA covers employers having 20 or more employees, labor unions, and employment agencies. Certain groups of employees are exempt from ADEA coverage, including public law enforcement personnel, such as police officers and firefighters. Uniformed military personnel also are exempt from ADEA coverage.

Equal Employment Opportunity Commission (EEOC)-1972

The EEOC is responsible for enforcing federal laws prohibiting employment discrimination, including Title VII, the U. S. Environmental Protection Agency (EPA), the ADEA, and the ADA. It receives, investigates, and processes charges of unlawful employment practices of employers filed by an individual, a group of individuals, or one of its commissioners. If the EEOC determines that there is "reasonable cause" that an unlawful employment practice has occurred, it is also authorized to sue on behalf of the charging individual(s) or itself. The EEOC participated in developing the Uniform Guidelines on Employee Selection Procedures.

Uniform Guidelines on Employee Selection Procedures-1978; adverse or disparate impact, approaches to determine existence of adverse impact, four-fifths rule, job-relatedness, business necessity, biased assessment procedures

In 1978, the EEOC and three other federal agencies-the Civil Service Commission (predecessor of the Office of Personnel Management) and the Labor and Justice Departments-jointly issued the Uniform Guidelines on Employee Selection Procedures. The Guidelines incorporate a set of principles governing the use of employee selection procedures according to applicable laws. They provide a framework for employers and other organizations for determining the proper use of tests and other selection procedures. The Guidelines are legally binding under a number of civil rights laws, including Executive Order 11246 and the Civil Rights Requirements of the National Job Training Partnership Act and the Wagner Peyser Act. In reviewing the testing practices of organizations under Title VII, the courts generally give great importance to the Guidelines' technical standards for establishing the job-relatedness of tests. Also, federal and state agencies, including the EEOC, apply the Uniform Guidelines in enforcing Title VII and related laws.

The Guidelines cover all employers employing 15 or more employees, labor organizations, and employment agencies. They also cover contractors and subcontractors to the federal government and organizations receiving federal assistance. They apply to all tests, inventories and procedures used to make employment decisions. Employment decisions include hiring, promotion, referral, disciplinary action, termination, licensing, and certification. Training may be included as an employment decision if it leads to any of the actions listed above. The Guidelines have significant implications for personnel assessment.

One of the basic principles of the Uniform Guidelines is that it is unlawful to use a test or selection procedure that creates adverse impact, unless justified. Adverse impact occurs when there is a substantially different rate of selection in hiring, promotion, or other employment decisions that work to the disadvantage of members of a race, sex, or ethnic group.

Different approaches exist that can be used to determine whether adverse impact has occurred. Statistical Techniques may provide information regarding whether or not the use of a test results in adverse impact. Adverse impact is normally indicated when the selection rate for one group is less than 80% (4/5) that of another. This measure is commonly referred to as the four-fifths or 80% rule. However, variations in sample size may affect the interpretation of the calculation. For example, the 80% rule may not be accurate in detecting substantially different rates of selection in very large or small samples. When determining whether there is adverse impact in very large or small samples, more sensitive tests of statistical significance should be employed.

When there is no charge of adverse impact, the Guidelines do not require that you show the job-relatedness of your assessment procedures. However, you are strongly encouraged to use only job-related assessment tools.

If your assessment process results in adverse impact, you are required to eliminate it or justify its continued use. The Guidelines recommend the following actions when adverse impact occurs:

Note that for the continued use of assessment instruments or procedures that cause adverse impact, courts have required justification by business necessity as well as validity for the specific use. The issue of business necessity is specifically addressed in Title I of the Civil Rights Act of 1991 (see next section).

An assessment procedure that causes adverse impact may continue to be used only if there is evidence that

Demonstrating job-relatedness of a test is the same as establishing that the test may be validly used as desired. Chapter 3 discusses the concept of test validity and methods for establishing the validity or job-relatedness of a test.

Demonstrating the business necessity of using a particular assessment instrument involves showing that its use is essential to the safe and efficient operation of the business and there are no alternative procedures available that are substantially equally valid to achieve the business objectives with a lesser adverse impact.

Another issue of importance discussed in the Uniform Guidelines relates to test fairness. The Uniform Guidelines define biased or unfair assessment procedures as those assessment procedures on which one race, sex, or ethnic group characteristically obtains lower scores than members of another group and the differences in the scores are not reflected in differences in the job performance of members of the groups.

Principle of Assessment: Use only assessment instruments that are unbiased and fair to all groups.
The meaning of scores on an unfair or biased assessment procedure will differ depending on the group membership of the person taking the test. Therefore, using biased tests can prevent employers from making equitable employment decisions. This leads to the next principle.

Use of biased tools may result in unfair discrimination against members of the lower scoring groups. However, use of fair and unbiased tests can still result in adverse impact in some cases. If you are developing your own test or procedure, expert help may be advisable to make sure your procedure is fair to all relevant groups. If you are planning to purchase professionally developed assessment tools, first evaluate the fairness of those you are considering by reading the test manuals and consulting independent reviews.

Title I of the Civil Rights Act of 1991

Title I of the CRA of 1991 reaffirms the principles developed in Title VII of the CRA of 1964, but makes several significant changes.

As noted previously, the Act specifically requires demonstration of both the job-relatedness and business necessity of assessment instruments or procedures that cause adverse impact. The business necessity requirement, set forth in Title I of the CRA of 1991, is harder to satisfy in defending challenged practices than a business purpose test suggested by the Supreme Court earlier.

Another important provision relates to the use of group-based test score adjustments to maintain a representative work force. The Act prohibits score adjustments, the use of different cut-off scores for different groups of test takers, or alteration of employment-related test results based on the demographics of the test takers. Such practices, which are referred to as race norming or within-group norming, were used by some employers and government agencies to avoid adverse impact.

The Act also makes compensatory and punitive damages available as a remedy for claims of intentional discrimination under Title VII and the ADA.

Americans with Disabilities Act (ADA) - 1990

Under the ADA, qualified individuals with disabilities must be given equal opportunity in all aspects of employment. The law prohibits employers with 15 or more employees, labor unions, and employment agencies from discriminating against qualified individuals with disabilities. Prohibited discrimination includes failure to provide reasonable accommodation to persons with disabilities when doing so would not pose undue hardship.

A qualified individual with a disability is one who can perform the essential functions of a job, with or without reasonable accommodation.

The ADA has major implications for your assessment practices.Your organization should develop a written policy on conducting testing and assessment of individuals with disabilities. This will help ensure compliance with the provisions of the ADA.

If you need assistance in complying with the ADA, there are several resources you may contact.

Record keeping of adverse impact and job-relatedness of tests

The Uniform Guidelines and subsequent regulations 2 require that all employers maintain a record of their employment-related activities, including statistics related to testing and adverse impact. Filing and record-keeping requirements for large employers (those with over 100 employees) are generally more extensive than those for employers with 100 or fewer employees. To learn more about the specific requirements, refer to EEOC regulations on record-keeping and reporting requirements under Title VII, and the ADA, 29 CFR part 1602, and the Uniform Guidelines.

The Standards for Educational and Psychological Testing - 1985; The Principles for the Validation and Use of Personnel Selection Procedures-1987

There are two resource guides published by major organizations in the testing field that will help you set up and maintain an assessment program. The principles and practices presented in these publications set the standards for professional conduct in all aspects of assessment.There are two resource guides published by major organizations in the testing field that will help you set up and maintain an assessment program. The principles and practices presented in these publications set the standards for professional conduct in all aspects of assessment.The Standards primarily address psychometric issues while the Principles primarily address the problems of making decisions in employee selection, placement, promotion, etc. The major concern of the Standards is general; the primary concern of the Principles is that performance on a test . . . is related to performance on a job or other measures of job success.

Compatibility of the Standards and the Principles with the Uniform Guidelines

The Uniform Guidelines were intended to be consistent with generally accepted professional standards for validating and evaluating standardized tests and other selection procedures. In this regard, the Guidelines specifically refer to the Standards.

It is strongly encouraged that you develop familiarity with both the Standards and the Principles in addition to the Uniform Guidelines. Together, they can help you conduct personnel assessment in a manner consistent with legal and professional standards.

Relationship between federal, state, and local employment laws

Some states and localities have issued their own fair employment practices laws, and some have adopted the federal Uniform Guidelines. These state and local laws may be more stringent than corresponding federal laws. When there is a contradiction, federal laws and regulations override any contradictory provisions of corresponding state or local laws. You should become thoroughly familiar with your own state and local laws on employment and testing before you initiate and operate an assessment program.




A document by the:

U.S. Department of Labor
Employment and Training Administration
1999