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Adverse Impact Formula:
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Adverse Impact Calculation is a statistical method used to identify potential discrimination in employment practices. It compares selection rates between minority and majority groups to determine if there's a significant disparity that might indicate unfair treatment.
The calculator uses the adverse impact formula:
Where:
Explanation: A ratio below 0.8 (the "four-fifths rule") typically indicates potential adverse impact and may warrant further investigation into employment practices.
Details: Adverse impact analysis is crucial for ensuring fair employment practices, complying with equal opportunity regulations, and identifying potential discriminatory patterns in hiring, promotion, or other employment decisions.
Tips: Enter both selection rates as decimal values (e.g., 0.25 for 25%). Both values must be valid (rates ≥ 0, majority rate > 0).
Q1: What constitutes adverse impact?
A: Typically, adverse impact is indicated when the selection rate for any protected group is less than 80% of the selection rate for the majority group.
Q2: What are protected groups?
A: Protected groups include categories based on race, color, religion, sex, national origin, age, disability, and genetic information under various employment laws.
Q3: Is adverse impact always illegal?
A: Not necessarily. Adverse impact may be justified if the practice is job-related and consistent with business necessity, and there's no alternative with less impact.
Q4: What statistical significance is used?
A: While the 80% rule is a guideline, statistical tests (like chi-square or Fisher's exact test) are often used to determine if observed differences are statistically significant.
Q5: How often should adverse impact analyses be conducted?
A: Regular monitoring (annually or per hiring cycle) is recommended to ensure ongoing compliance and identify trends early.