Adverse impact
The four-fifths rule,
calculated.
If any group is selected at less than 80 percent of the rate of the most-selected group, federal agencies generally treat that as evidence of adverse impact. Enter your numbers for any hiring step and see where you stand.
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Selection rates
and impact ratios.
How the rule works
A rule of thumb,
not a verdict.
The four-fifths rule comes from the Uniform Guidelines on Employee Selection Procedures, which the EEOC and other federal agencies adopted in 1978. Section 1607.4(D) (opens in a new tab) says a selection rate for any race, sex or ethnic group that is less than four-fifths of the highest group's rate will generally be regarded as evidence of adverse impact.
It cuts both ways. Smaller differences can still count where they are significant in both statistical and practical terms, and larger ones may not where they rest on small numbers that are not statistically significant. Treat a ratio under 0.80 as a reason to look closely at that step, and a ratio over it as a reason to keep measuring, not as clearance.
Run it on every step that selects: the resume screen, the phone screen, each interview round and the offer. A process can pass overall and fail at one step.
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The four-fifths rule,
the short answers.
What is the four-fifths rule?
A rule of thumb from the federal Uniform Guidelines on Employee Selection Procedures (29 CFR 1607.4(D)). If a group's selection rate is less than four-fifths, or 80 percent, of the rate for the group with the highest rate, federal enforcement agencies generally regard that as evidence of adverse impact.
How do you calculate the four-fifths rule?
Divide the number selected by the number of applicants for each group to get its selection rate. Divide each group's rate by the highest group's rate to get its impact ratio. A ratio below 0.80 indicates adverse impact under the rule.
Can you show a worked example?
Group A: 100 applicants, 60 advanced, a 60% selection rate. Group B: 80 applicants, 30 advanced, a 37.5% rate. Group B's impact ratio is 37.5 divided by 60, or 0.625, below 0.80, so the step shows adverse impact against Group B under the rule.
Does passing the four-fifths rule mean a process is fair?
Not on its own. The Guidelines say smaller differences may still constitute adverse impact where they are significant in both statistical and practical terms, or where an employer's actions have discouraged applicants from a group.
What about small numbers of applicants?
The Guidelines say a larger difference may not indicate adverse impact when it rests on small numbers and is not statistically significant. Where the numbers are too small to be reliable, the agencies may look at a longer period or at evidence from similar uses elsewhere.
How does Talenry use the rule?
Talenry runs the four-fifths test on each of your own pipelines, so the evidence is about your hiring rather than about a vendor model's test data.
This page explains a federal rule of thumb and is not legal advice. Talk to employment counsel about your own selection procedures.