Free HR calculator
Adverse Impact Calculator
Run the four-fifths check on a hiring round, a promotion cycle, or a reduction list. Enter how many people from each group were considered and how many received the favorable outcome. The tool shows each group’s selection rate and its ratio against the highest rate. It flags any group below the 80% line, which federal enforcement agencies treat as a sign of adverse impact.
Before you start
Your selection data
One row per group, with the favorable outcome as selected: hired, promoted, or kept in a reduction. Label the rows with the groups you are comparing.
How to count
Selected means the favorable outcome. For hiring, the people hired from each group’s applicants. For a promotion cycle, the people promoted from those eligible. For a reduction, the people kept from those considered in the decisional unit.
Very small groups make the ratio jumpy. The federal Q and A says agencies generally analyze groups that make up at least 2% of the pool. One selection either way can swing a small group across the line. Treat small-group results as a prompt to look closer, not a verdict.
Four-fifths check
How each group compares
The method
What the four-fifths rule is and how this is calculated
The four-fifths rule comes from the Uniform Guidelines on Employee Selection Procedures, published at 29 CFR 1607.4. It sets the test as a comparison of selection rates. A rate for any race, sex, or ethnic group that falls below four-fifths, or 80%, of the highest group’s rate is the trigger. The federal enforcement agencies will generally regard that gap as evidence of adverse impact. It applies to any procedure that selects some people over others, hiring, promotion, and selection for layoff included.
How this is calculated
The method
The enforcement Q and A lays out four steps. Work out the selection rate for each group by dividing the number selected by the number considered. Find the group with the highest rate. Divide every other group’s rate by that highest rate. Any result below 80% is treated as a sign of adverse impact. This tool runs those four steps on the rows you enter and shows the math for each group so nothing is hidden.
A worked example
Suppose 72 people from one group were considered and 7 were selected, a rate of 9.7%. From a second group, 63 were considered and 3 were selected, a rate of 4.8%. The first group holds the highest rate, so the second group’s ratio is 4.8 divided by 9.7, which is about 49%. That is well below the 80% line, so the check flags the second group. The selection process then needs a documented, job-related justification or a revised set of criteria.
What a flag means
A flag is where the work starts, not where it ends. The Q and A is explicit that the rule is a rule of thumb for drawing an initial inference. It is not a tolerance for any amount of discrimination and not a finding of illegality on its own. The presence of adverse impact does not require abandoning the procedure. It requires justifying it as job related and consistent with business necessity, and considering whether an alternative with less impact would serve the same purpose.
Small numbers and large numbers
The rule gets unstable on small groups, where one selection either way can swing the ratio across the line. The Guidelines note that small-number differences may not constitute adverse impact when they are not statistically significant. The reverse also holds. Where large numbers of selections are made, relatively small rate differences can constitute adverse impact if they are significant in statistical and practical terms. That is why practitioners pair the four-fifths screen with a statistical significance test on anything consequential.
Carry this into the decision
Run the full review before the list is final
The RIF / Restructure Planning Kit includes an Adverse-Impact Review that runs this check across age, sex, and race or ethnicity on your selection list, with the selection criteria worksheet and the documentation trail alongside it.
$129. 30 days. Reply to your receipt or email support@truestephr.com for a full refund. No form or explanation is required, and you keep the files.
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This tool estimates from the figures you enter. It is general information rather than legal, tax, or accounting advice, so check the result against your own records before you rely on it.