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Disparate Impact Formula:
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Disparate Impact refers to employment practices that appear neutral but have a disproportionate adverse impact on protected groups. The EEOC 4/5ths rule states that disparate impact exists if the selection rate for any protected group is less than 80% of the rate for the group with the highest selection rate.
The calculator uses the Disparate Impact formula:
Where:
Interpretation: DI < 0.8 indicates disparate impact under the EEOC 4/5ths rule.
Details: Calculating disparate impact is crucial for ensuring fair employment practices, compliance with equal opportunity laws, and identifying potential discrimination in hiring, promotion, and other employment decisions.
Tips: Enter the percentage of minority group members advanced and the percentage of majority group members advanced. Both values must be between 0-100%.
Q1: What is the EEOC 4/5ths rule?
A: The 4/5ths rule is a guideline used by the Equal Employment Opportunity Commission that states a selection rate for any protected group that is less than 80% of the rate for the group with the highest rate generally indicates adverse impact.
Q2: What constitutes disparate impact?
A: Disparate impact exists when the DI calculation results in a value less than 0.8 (80%), indicating the protected group's advancement rate is less than 80% of the majority group's rate.
Q3: What are protected groups?
A: Protected groups include race, color, religion, sex, national origin, age, disability, and genetic information as defined by federal employment laws.
Q4: Is disparate impact always illegal?
A: Not necessarily. Employers may defend against disparate impact claims by showing the practice is job-related and consistent with business necessity.
Q5: How often should disparate impact analysis be conducted?
A: Regular analysis is recommended, particularly when implementing new hiring practices, during annual compliance reviews, or when patterns suggest potential issues.