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4/5th Rule Formula:
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The 4/5th Rule, also known as the 80% rule, is a guideline established by the Equal Employment Opportunity Commission (EEOC) to identify potential disparate impact in hiring and employment practices. It helps determine if selection procedures adversely affect protected groups.
The calculator uses the 4/5th Rule formula:
Where:
Interpretation: A ratio below 0.8 (80%) indicates potential adverse impact and may trigger further investigation under EEOC guidelines.
Details: The 4/5th Rule serves as an initial screening tool to identify potential discrimination in employment practices. It helps organizations ensure fair hiring processes and comply with equal employment opportunity laws.
Tips: Enter the selection rates for both minority and majority groups as percentages. Both values must be between 0-100%, and the majority rate cannot be zero.
Q1: What constitutes adverse impact under the 4/5th Rule?
A: Adverse impact exists when the selection rate for any protected group is less than 80% of the rate for the group with the highest selection rate.
Q2: Is the 4/5th Rule a legal requirement?
A: While not a strict legal standard, it is a widely accepted enforcement guideline used by the EEOC and courts to identify potential discrimination.
Q3: What happens if adverse impact is found?
A: Employers may need to demonstrate that their selection procedures are job-related and consistent with business necessity, or consider alternative practices with less adverse impact.
Q4: Can the 4/5th Rule be applied to other employment decisions?
A: Yes, it can be used for promotions, terminations, and other employment actions where selection rates can be compared between groups.
Q5: Are there limitations to the 4/5th Rule?
A: The rule is most reliable with larger sample sizes. Small sample sizes may produce unreliable results, and statistical significance testing may be needed for confirmation.