Maker Label Studio

Adverse Impact (4/5 Rule) Calculator

Evaluate selection rates to determine potential adverse impact

Group Data

About the Adverse Impact (4/5 Rule) Calculator

HR, legal, recruiting, and people analytics teams use an adverse impact four-fifths rule check to compare selection rates across demographic groups in hiring, promotion, testing, or reduction-in-force decisions. The calculator flags impact ratios below 80 percent so teams can identify selection procedures that may need validation, review, or legal analysis.

How it works

  1. Enter the number of applicants or candidates in each group.
  2. Enter the number selected, advanced, passed, or retained for each group.
  3. Review each group's selection rate.
  4. Compare impact ratios against the highest selection rate.
  5. Investigate any result below four-fifths with the full context and appropriate counsel.

Frequently asked questions

What is the four-fifths rule in adverse impact analysis?

Under the Uniform Guidelines, a selection rate for one group that is less than four-fifths of the rate for the group with the highest selection rate is generally regarded as evidence of adverse impact.

Does an impact ratio below 80 percent prove discrimination?

No. It is a screening rule, not a final legal conclusion. Sample size, job relatedness, validation evidence, and the full employment process matter.

Which group is the reference group for the calculation?

The common four-fifths calculation compares each group with the group that has the highest selection rate. Some analyses may also use a legally or statistically appropriate reference group.

Can the four-fifths rule be used for promotions or layoffs?

Yes. It can be applied to any selection procedure, including hiring, promotion, testing, certification, termination, or reduction decisions, when group counts and outcomes are available.

References