1. What is Adverse Impact?

Adverse impact refers to employment practices that appear neutral but have a disproportionate negative effect on protected groups. The EEOC (Equal Employment Opportunity Commission) uses the 80% rule (or four-fifths rule) to identify potential discrimination in hiring, promotion, and other employment decisions.

2. How Does the Calculator Work?

The calculator uses the EEOC's four-fifths rule formula:

Where:

• \( Minority\ Rate \) — Selection rate for the minority group (%)
• \( Majority\ Rate \) — Selection rate for the majority group (%)
• \( Impact\ Ratio \) — Ratio of minority to majority selection rates (dimensionless)

Interpretation: An impact ratio below 0.8 (80%) indicates potential adverse impact according to EEOC guidelines.

3. Importance of Adverse Impact Analysis

Details: Regular adverse impact analysis helps organizations identify potential discrimination, ensure fair employment practices, maintain legal compliance, and promote diversity and inclusion in the workplace.

4. Using the Calculator

Tips: Enter the selection rates for minority and majority groups as percentages (0-100%). The calculator will compute the impact ratio and indicate whether adverse impact exists based on the 80% rule threshold.

5. Frequently Asked Questions (FAQ)

Q1: What is the legal basis for the 80% rule?
A: The 80% rule comes from the EEOC's Uniform Guidelines on Employee Selection Procedures and is used as a practical threshold for identifying potential discrimination.

Q2: Does adverse impact always indicate discrimination?
A: No, adverse impact indicates a statistical disparity that warrants further investigation. Employers may have legitimate business reasons for the disparity.

Q3: What groups are protected under adverse impact analysis?
A: Protected groups include race, color, religion, sex, national origin, age (40+), disability, and genetic information.

Q4: What should employers do if adverse impact is detected?
A: Employers should review their selection procedures, validate the job-relatedness of requirements, and consider alternative practices that reduce adverse impact.

Q5: Are there exceptions to the 80% rule?
A: Yes, statistical significance tests and practical significance considerations may modify the interpretation, and small sample sizes may require different analytical approaches.