Disabilities Act: cheers and fears.

Last July, Congress passed legislation that potentially affects half-a-million businesses and nearly 43 million disabled Americans.

The passage of Title I of the Americans with Disabilities Act (ADA) of 1990 prohibits private employers, state and local governments, employment agencies and labor unions from discriminating against qualified individuals with disabilities in job application procedures, hiring, firing, advancement, compensation, job training and other terms, conditions and privileges of employment. (As of July 26, 1992, businesses with 25 or more employees must abide by the law. In two years, companies with 15 or more employees will have to comply with the law.)

Business owners are bound legally to provide physically and mentally impaired workers the same opportunities as other workers. And to avoid even the semblance of discrimination, personnel directors must create a bias-free interview environment for prospective employees. The legally correct interview will not include:

* Questions about disabilities.

* Questions about medical history, prescription drug use, prior workers' compensation or health-insurance claims, work absenteeism because of illness or past treatment for alcoholism, drug use or mental illness.

* Requirement of medical exams prior to a job offer unless every worker takes one.

* Refusals to hire out of fear of increased health insurance costs.

Additionally, union dictates will have to be revised to reduce conflicts between ADA and seniority rules. Employers can be held liable if their employment agencies discriminate. And only immediate business necessity or job-related measures can allow an employer to withdraw an employment offer.

Businesses also must create ways to identify the requirements of essential job functions. These may include: skills and abilities job analysis to determine the job-related education, knowledge and training to do a job; fitness and physical analysis to determine physical skills needed to do a job, and worker-oriented analysis to examine behavior, thinking processes and attitude toward a job.

To accomplish these goals, companies may need to hire specially trained human maintenance workers to avoid potential problems while hiring workers who will produce lower turnovers. The federal Equal Employment Opportunity Commission (EEOC) will enforce the law.

Are companies being forced into a position where they will have no choice over whom they hire? Not really. But they must be able to show that their hiring procedures are based upon objective--not subjective--measures. The new law raises other concerns, such as, will the law affect a company's health care and benefit practices? Proponents don't think so. They say health insurance costs won't rise for handicapped workers because companies will create health care plans covering "pre-existing" chronic conditions.

Negative reinforcement is not the only incentive businesses have for complying with the ADA. The Internal Revenue Code has three disability-related provisions that provide tax relief: (1) disabled access tax credit; (2) a tax deduction to remove architectural and transportation barriers to people with disabilities and elderly individuals; and (3) targeted jobs tax credit. Call 1-800-829-3676 to obtain IRS publication No. 907, which covers these provisions.

Philip L. Gordon, an attorney in the Washington, D.C., office of Latham & Watkins, said of the ADA: "If employers stay away from preconceived notions on the limitations created by an applicant's disability and concentrate on evaluating the applicant's ability to perform specific job functions, they should be able to avoid liability problems."

To obtain an ADA information manual, call the EEOC at 800-663-EEOC, or 800-669-4000 for the EEOC office nearest you.