The Uniform Guidelines on Employee Selection Procedures were issued to help employers make equitable employment decisions, such as for hiring and selection, retention, and test use, in accordance with Title VII of the Civil Rights Act.
The guidelines can assist employers in determining if their tests and selection procedures are lawful by validating that they are job-related and consistent with business necessity.
Richard Fischer, Ph.D., a psychometric and instructional systems expert and former director of testing operations for the U.S. Department of Labor's Office of Federal Contract Compliance Programs (OFCCP), talked to SHRM Online about common misconceptions surrounding the guidelines.
SHRM Online: Are the Uniform Guidelines federal law?
Fischer: The guidelines are often confused with Title VII, which is federal law, but the guidelines are not law that applies to all employers. The guidelines are only binding legally on federal contractors and allow OFCCP to enforce violations, which they do with the full force and effect of law. Federal courts routinely reference the guidelines in decisions involving exams being challenged as discriminatory, but a federal court cannot enforce them. Only OFCCP has that legal authority.
When Congress was revising the Civil Rights Act of 1964 into what would become the Civil Rights Act of 1991, primarily to incorporate statistical discrimination into law, known as disparate impact discrimination, it incorporated significant Uniform Guidelines content. But it was disparate impact theory which became federal law in the Civil Rights Act of 1991, not the Uniform Guidelines. Another misconception is that the Equal Employment Opportunity Commission (EEOC) enforces the guidelines. It does not, despite having the lead role in writing and issuing them, nor can OFCCP enforce Title VII, which makes the very same disparate impact discrimination illegal.
SHRM Online: Doesn't the EEOC state that the guidelines apply to most private employers having 15 or more employees through Title VII?
Fischer: Yes, but they apply in a nonlegal sense to help employers make equitable employment decisions, which is what Title VII requires by outlawing both statistical and intentional discrimination. For employers who are not federal contractors, the guidelines are simply guidelines, with no potential liability for violations.
SHRM Online: What types of employment practices are illegal under the guidelines?
Fischer: Any employment decision which causes adverse impact the employer can't justify by showing it's job-related. Title VII makes both disparate impact and disparate treatment discrimination unlawful. The guidelines outlaw only disparate impact discrimination. A disparate impact claim does not require employer intent to discriminate—a plaintiff identifies a claim statistically based on an employment practice having caused adverse impact.
Adverse impact means that a practice caused one or more protected demographic groups to be disadvantaged, based on the hiring or pay rate of the least-favored group being less than 80 percent of the hiring or pay rate of the most-favored group hired or paid at the highest rate. Plaintiffs often supplement results of the 80 percent rule with additional standard deviations analyses to advance their claim.
A practice with adverse impact is not illegal. The employer can defend against the claim by showing validation for the challenged exam. Since validity is key to defending a disparate impact claim involving an exam, it is important to note that defending the claim requires the employer to do nothing more than what any employer should already have done prior to using the exam—documented that exam use has been shown to be valid for that employer's specific use of the test. No test in and of itself is valid. Rather, validity of a test comes from showing that an employer can make an accurate decision about a person with a particular score on the test better than chance, and that requires local validation.
Note, too, that the employer is held liable for illegal exam use, not the test seller or external party which provided the exam.
SHRM Online: What are some other typical misunderstandings employers have about the Uniform Guidelines?
Fischer: That an employer, federal contractor or noncontractor has any legal or psychometric requirement to investigate alternative assessments with lower adverse impact as part of their test validation. This is a very common misunderstanding, maybe because OFCCP, inexplicably, enforces the nonrequirement. In 2016, for instance, OFCCP cited Gordon Food Services for violating the guidelines by not investigating suitable alternatives and finding their hiring exam to be discriminatory. The case settled for $1.85 million, with the settlement agreement then requiring Gordon Food to investigate alternatives in the future, which no employer had legal obligation to do in the first place. So, it's not surprising that many employers spend time and money to investigate lower-impact alternatives for their exams, wrongly assuming it is a legal requirement. Instead of investigating suitable alternatives, employers should focus on documenting acceptable local validity for each employment exam they use.
It could even be argued that investigating alternatives can only hurt an employer. In EEOC v. Ford Motor Co. and United Automobile Workers of America (2005), for instance, Ford's written Apprenticeship Training Selection System exam caused adverse impact against black examinees competing for skilled trade apprenticeships. When Ford provided acceptable validation, the EEOC responded by offering a suitable alternative that Ford, itself, had developed but chose not to use, thus providing the agency with the suitable alternative exam it needed under Title VII to find Ford's exam discriminatory.
Another misconception is that an employer can't validate a test after its use to defend a disparate impact claim. Despite attorneys routinely insisting otherwise to facilitate quick settlements, an employer can try to validate the challenged test after use to defend a claim. While courts and plaintiffs' experts naturally tend to be suspicious of post-use validation, there is nothing in the Uniform Guidelines or Title VII that requires a challenged exam to have been validated prior to use. It is the results of the validation that matter, not when validation was conducted.
Employer test use without prior validation is poor assessment practice which can result in bad employment decisions, such as hiring employees lacking the needed job-related knowledge and skills, but it is not illegal to use a validity-impaired exam. Legally, validity is required only to defend a disparate impact claim if test use causes adverse impact. Psychometric issues aside, however, an employer trying to validate a test after use to justify its use may be disappointed if post-use validation cannot be shown.