1. What Is Disparate Impact?

Disparate impact refers to employment practices that appear neutral but have a disproportionate adverse effect on members of a protected class. In Australia, this concept is used to identify potential discrimination in hiring, promotion, and other employment decisions.

2. How Does The Calculator Work?

The calculator uses the disparate impact formula:

Where:

• Minority Rate — Selection rate for the minority group
• Majority Rate — Selection rate for the majority group

Explanation: A ratio below 0.8 (or 80%) typically indicates potential adverse impact, suggesting the practice may disproportionately affect the minority group.

3. Importance Of Disparate Impact Calculation

Details: Calculating disparate impact helps organizations identify potentially discriminatory practices, ensure compliance with equal opportunity laws, and promote fair employment practices in the Australian context.

4. Using The Calculator

Tips: Enter selection rates for both minority and majority groups as dimensionless values (typically between 0 and 1). Both values must be valid (rates ≥ 0, majority rate > 0).

5. Frequently Asked Questions (FAQ)

Q1: What constitutes a problematic disparate impact ratio?
A: In Australia, a ratio below 0.8 (or 80%) is generally considered to indicate potential adverse impact that may require further investigation.

Q2: Is disparate impact illegal in Australia?
A: While not automatically illegal, practices with significant disparate impact may violate anti-discrimination laws if they cannot be justified as job-related and consistent with business necessity.

Q3: What factors should be considered alongside the ratio?
A: Statistical significance, sample size, practical significance, and whether the practice can be justified by business necessity should all be considered.

Q4: How often should disparate impact analyses be conducted?
A: Regular monitoring is recommended, particularly when implementing new hiring practices, promotion systems, or during organizational changes.

Q5: Are there industry-specific guidelines in Australia?
A: While the general principle applies across industries, specific sectors may have additional guidelines or reporting requirements related to equal employment opportunity.