1. What Is Disparate Impact?

Disparate impact refers to employment practices that appear neutral but have a discriminatory effect on a protected group. It's a legal theory used to prove discrimination in employment cases.

2. How Does The Calculator Work?

The calculator uses the disparate impact formula:

Where:

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

Explanation: A ratio below 0.8 (or 80%) typically indicates potential adverse impact according to the EEOC's Four-Fifths Rule.

3. Importance Of Disparate Impact Calculation

Details: Calculating disparate impact helps organizations identify potentially discriminatory practices, ensure fair hiring and promotion processes, and maintain legal compliance with equal employment opportunity laws.

4. Using The Calculator

Tips: Enter selection rates for both minority and majority groups as decimal values (e.g., 0.25 for 25%). Both values must be positive numbers, with the majority rate greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: What is the Four-Fifths Rule?
A: The Four-Fifths Rule is a guideline from the Equal Employment Opportunity Commission (EEOC) that states a selection rate for any racial, ethnic, or sex group that is less than four-fifths (80%) of the rate for the group with the highest rate may indicate adverse impact.

Q2: What constitutes a problematic disparate impact ratio?
A: Generally, a ratio below 0.8 is considered evidence of potential adverse impact, though courts may consider other statistical evidence and contextual factors.

Q3: Can disparate impact analysis be applied beyond hiring?
A: Yes, disparate impact analysis can be applied to various employment practices including promotions, terminations, compensation, and other employment decisions.

Q4: What should I do if my calculation shows potential adverse impact?
A: If you identify potential adverse impact, you should review the practice for job-relatedness and business necessity, and consider alternative practices with less discriminatory effect.

Q5: Are there limitations to disparate impact analysis?
A: Disparate impact analysis should be conducted with adequate sample sizes and proper statistical methods. Small sample sizes may yield unreliable results, and other factors should be considered in the overall assessment.