We test everyone, regardless of claimed degrees etc. This includes tests on literacy, numeracy and various technical areas, as well as an array of probity checks Generally you have not verified the qualifications yet at interview (we always deal directly with the college as occasionally certificates are faked). You would be surprised at how weak some people are, even with first class degrees. My HR manager (whom I recruited myself) recruited one person with a law degree from a mid ranking university. She seemed excellent on paper and personality wise, but she was poisonous in the business. It eventually transpired that she had been given credits for large parts of her degree because she had missed vast chunks of the course through depression. She was awarded a 2:1 but in fact had missed entire segments of course work. This direct experience led us to take additional verification measures for recruits now.
It is also unwise to assume that people are remotely literate. I employ a number of PhDs, mostly in maths but one of them got his in a specialised area of engineering them became a derivatives trader in a bank. He is undoubtedly very bright, but very unreliable when it comes to written text. These things matter to clients and also hamper his development because someone else has to check any work that is in any way published. Basic educational standards have fallen in my opinion. We find ourselves picking up some of the slack, particularly with literacy, as it is harder to test in a short period than numeracy.
I wish that we had as a country retained the technical colleges and polytechnic system. Not everyone is or can be academically equal and by no means are all degrees equal.