1. What is Adverse Impact Ratio?

The Adverse Impact Ratio is a statistical measure used to evaluate whether employment practices (such as layoffs) have a disproportionately negative effect on members of a protected group. It calculates the ratio of selection rates between protected and non-protected groups.

2. How Does the Calculator Work?

The calculator uses the Impact Ratio formula:

Where:

• \( \text{Protected Group Retained} \) — Number of protected group members retained after layoffs
• \( \text{Total Protected} \) — Total number of protected group members before layoffs
• \( \text{Non-Protected Retained} \) — Number of non-protected group members retained after layoffs
• \( \text{Total Non-Protected} \) — Total number of non-protected group members before layoffs

Explanation: The formula compares the retention rates between protected and non-protected groups to identify potential discriminatory patterns in layoff decisions.

3. Importance of Adverse Impact Analysis

Details: Adverse impact analysis is crucial for ensuring compliance with equal employment opportunity laws and identifying potential discrimination in workforce reduction decisions. It helps organizations avoid legal liabilities and maintain fair employment practices.

4. Using the Calculator

Tips: Enter the number of protected group members retained, total protected group members, non-protected group members retained, and total non-protected group members. All values must be non-negative integers, and retained numbers cannot exceed total numbers.

5. Frequently Asked Questions (FAQ)

Q1: What constitutes a protected group?
A: Protected groups typically include categories based on race, color, religion, sex, national origin, age (40+), disability, and genetic information as defined by EEOC guidelines.

Q2: What is the "four-fifths rule" for adverse impact?
A: The four-fifths rule states that an impact ratio below 0.80 (or 80%) generally indicates adverse impact, suggesting the selection process may be discriminatory.

Q3: Is adverse impact analysis legally required?
A: While not always legally mandated, conducting adverse impact analysis is considered a best practice and can provide important legal defense in discrimination claims.

Q4: What should I do if the impact ratio is below 0.80?
A: A ratio below 0.80 doesn't automatically prove discrimination but warrants further investigation into the business necessity and job-relatedness of the selection criteria.

Q5: Can this calculator be used for other employment decisions?
A: Yes, the same formula can be applied to hiring, promotion, and other employment selection processes to analyze potential adverse impact.