Adverse Impact Calculator

Adverse Impact 80% Rule:

\[ Impact\ Ratio = \frac{Minority\ Selection\ Rate}{Majority\ Selection\ Rate} \]

Impact Ratio (decimal):

EEO Adverse Impact (80% Rule):

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1. What Is Adverse Impact?

Adverse impact occurs when a seemingly neutral employment practice disproportionately excludes members of a protected group. It is a key concept in Equal Employment Opportunity (EEO) compliance and discrimination analysis.

2. How Does the 80% Rule Work?

The calculator uses the EEOC's 80% rule (Four-Fifths Rule):

\[ Impact\ Ratio = \frac{Selection\ Rate\ of\ Minority\ Group}{Selection\ Rate\ of\ Majority\ Group} \]

Where:

Impact Ratio — Ratio of minority to majority selection rates
Minority Selection Rate — Percentage of minority applicants selected
Majority Selection Rate — Percentage of majority applicants selected

Interpretation: If the impact ratio is less than 0.8 (80%), adverse impact is indicated and requires further investigation.

3. Importance of Adverse Impact Analysis

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

4. Using the Calculator

Tips: Enter the selection rates for both minority and majority groups as percentages (0-100%). The calculator will compute the impact ratio and determine if adverse impact exists under the 80% rule.

5. Frequently Asked Questions (FAQ)

Q1: What constitutes a protected group?
A: Protected groups include race, color, religion, sex, national origin, age (40+), disability, and genetic information under federal EEO laws.

Q2: Is adverse impact always illegal?
A: Not necessarily. Adverse impact indicates potential discrimination, but employers may defend practices as job-related and consistent with business necessity.

Q3: What sample size is needed for reliable analysis?
A: Larger samples provide more reliable results. Generally, groups should have at least 30-50 applicants for meaningful analysis.

Q4: What if the impact ratio is exactly 0.8?
A: An impact ratio of 0.8 or greater generally indicates no adverse impact under the 80% rule standard.

Q5: What steps should be taken if adverse impact is found?
A: Investigate the practice, validate job-relatedness, consider alternative selection methods, and document the business necessity if maintaining the practice.