There are many tests and many uses for tests.  Validation of knowledge and skills tests is a process of documentation.  It shows how the need for the test arose, how the job requires it, and it describes a methodology to measure the knowledge and skill in a scientific and objective way.

The Uniform Guidelines on Employee Selection Procedures (1978) require that any selection procedures that have an adverse impact on protected groups must be shown to be job related (or valid).  Therefore, developers of tests usually try to meet those guidelines in the event that the tests do have adverse impact.  Also, from the employer's perspective, it is very useful to have a job-related test.

When tests are job related, they have more credibility with the persons taking them, giving the test takers more confidence in their results and providing less likelihood of complaint or litigation.

A validation test is usually the product of research by a psychologist.  The resulting validation report is the documented evidence by a professional researcher of the validity of the selection procedure.  In the event of complaint or litigation, the report would usually be entered into evidence.  In addition, the author would provide testimony that the report reflects generally-accepted professional practice and is in conformance with the requirements of the Uniform Guidelines on Employee Selection Procedures.

Equal Employment Opportunity Commission, Civil Service Commission, Department of Labor, and Department of Justice.  (1978, August).  Uniform guidelines on employee selection procedures.  Federal Register, 43, 38290-38315.