December 2012 Volume XI No. 10 Taking Care of Business
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Hiring in the New Year? Considerations for Employment Testing and Screening

Shelbie Byers
Shelbie Byers

As the economy continues to grow and employers add to their workforce, many employers may find it useful to use pre-employment testing and/or various screening methods in making hiring decisions. Pre-employment testing and screening can come in many different forms and at any stage of the hiring process. Some of the more popular tests and screening procedures include personality or cognitive testing, physical ability tests, credit checks, and criminal background checks. While testing and screening can be an effective way to hire the best candidate from a highly saturated workforce, it is important to make sure such methods do not run afoul of federal and/or state laws.

Federal Considerations in Pre-Employment Testing and Screening
Under federal law, employment testing and screening may not be used as a method to purposefully discriminate against applicants and employees based on race, color, sex, national origin, religion, disability and/or age (40 or older). Employers must also be sure that their testing and screening procedures do not disproportionately impact or exclude people in a protected class, unless the employer can legally justify the test or screening procedure. While there are several federal laws that may apply to various hiring procedures, including the Fair Credit Reporting Act (“FCRA”) regarding background checks, or the Genetic Information Nondiscrimination Act (“GINA”) regarding health insurance and employment, there are three laws in particular, which are governed by the Equal Employment Opportunity Commission (“EEOC”) that covered employers must be aware of in making hiring decisions based on testing and/or screening procedures: Title VII of the Civil Rights Act of 1964 (“Title VII”), Title I of the Americans with Disabilities Act (“ADA”), and the Age Discrimination in Employment Act (“ADEA”).

Title VII
Title VII prohibits employment discrimination based on race, color, religion, sex, or national origin. Title VII permits tests so long as they are not “designed, intended or used to discriminate because of race, color, religion, sex or national origin.” 42 U.S.C. § 2000e-2(h). Additionally, employers are not permitted to (1) adjust the scores of, (2) use different cutoff scores for, or (3) otherwise alter the results of employment-related tests on the basis of race, color, religion, sex, or national origin. Id. at §2000e-2(l). Employers may not use so-called “neutral tests” or screening procedures that disparately impact individuals in a protected category. If such neutral tests or screening procedures affect protected classes of employees or applicants, the employer must show that the selection procedure is job-related and consistent with business necessity, and that there is no less discriminatory alternative.

ADA
The ADA prohibits inquiries on job applications and during interviews relating to an applicant's disability status or medical history and conditions. Here are a few sections of the ADA that an employer should be aware of regarding testing and screening:

  • When hiring, an employer may not ask questions about disability or require medical examinations until after it makes a conditional job offer to the applicant. 42 U.S.C. §12112 (d)(2).
  • After making a job offer, an employer may ask disability-related questions and conduct medical examinations as long as it does so for all individuals entering the same job category. Id. at § 12112(d)(3).
  • An employer may ask questions about disability or require a medical examination only if doing so is job-related and consistent with business necessity. Id. at § 12112(d)(4).
Employers should also be aware of reasonable accommodation requirements in testing and must ensure that their tests are not screening out individuals with a disability absent a showing that the screen is job-related and consistent with business necessity.

ADEA
The ADEA prohibits discrimination in employment based on age (40 and over). Employers must make sure that their employment testing and screening do not discriminate against individuals over 40 or have a disparate impact on employees or applicants over 40 unless the employer can show that the hiring decision is based on a reasonable factor other than age.

Indiana Considerations in Pre-Employment Testing and Screening
Indiana employers hiring as of July 1, 2012 had to comply with H.B. 1033, which provides that employees may legally state on documents, including employment applications, that they do not have any previous criminal records if such records have been restricted or sealed. H.B. 1033 also prohibits employers from asking employees and/or applicants whether their criminal records have been sealed or restricted. With the New Year, there are additional requirements under H.B. 1033 that employers and criminal history providers should be aware of as they engage in pre-employment hiring and screening procedures. A criminal history provider is “a person or an organization that assembles criminal history reports and either uses the report or provides the report to a person or an organization other than a criminal justice agency or law enforcement agency.” Employers who conduct background checks on potential applicants often use criminal history providers. As of July 1, 2013, criminal history providers may only provide information that relates to a conviction and will no longer be permitted to provide information regarding:
  1. An infraction, an arrest, or charge that did not result in a conviction.
  2. A record that has been expunged.
  3. A record that is restricted by a court or the rules of a court.
  4. A record indicating a conviction of a Class D felony if the Class D felony conviction:
    1. Has been entered as a Class A misdemeanor conviction; or
    2. Has been converted to a Class A misdemeanor conviction.
  5. A record that the criminal history provider knows is inaccurate.
In addition to the federal considerations discussed above, Indiana also has anti-discrimination laws that employers should consider as they implement testing and screening procedures to ensure they are not unlawful under Indiana state law. The Indiana Civil Rights Law, Ind. Code § 22-9-1-2 et. seq., which applies to employers with 6 or more employees, prohibits discrimination based on race, color, religion, national origin, ancestry, or sex. Indiana also has the Employment Discrimination Against Disabled Persons law, Ind. Code § 22-9-5-1 et. seq., which applies to employers with 15 or more employees and prohibits discrimination against qualified individuals with a disability. Finally, Indiana also has an Age Discrimination Act, Ind. Code § 22-9-2-1, which applies to employers with at least one employee who are not otherwise covered by the ADEA, and prohibits discrimination against individuals who are between 40 and 75 years old. Thus, all testing and screening procedures should be carefully scrutinized to make sure they comply with state and federal law.

Best Practices
The foregoing considerations should not mean that employers do away with employment testing and/or screening; however, consistent with such considerations, there are some measures employers can implement to lessen the chances that their hiring decisions will be questioned under federal or state law.
  • Develop narrowly tailored written policies and procedures for screening and testing applicants, and identify the essential job requirements the test and/or screening procedure will be used for in the hiring process.
  • Regularly review and evaluate the testing and screening procedures to ensure they are not discriminatory and/or disproportionately and unnecessarily impacting protected groups.
  • Keep accurate records and justifications for hiring decisions based on testing and/or screening.
  • Do not rely only on tests and screening for choosing the right candidate.
  • Properly train managers, hiring personnel and HR employees on proper and legal testing, screening and hiring procedures that are consistent with federal and state law.
  • The legal landscape is consistently changing as new cases are decided, various administrative regulations are implemented, and laws are enacted, so we would always recommend having a labor and employment attorney review your employment testing and/or screening procedures before implementing them or on a regular basis to ensure they are compliant with the law.

If you have any questions about employment testing and/or screening, contact Shelbie J. Byers or your Hoeppner Wagner & Evans LLP relationship attorney.

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