Calculating the Four Fifths Rule
Unit 2 Workforce Planning and Employment - spends a good bit of time talking about assessing adverse impact —when
a test or other hiring system discriminates against one group more than
another.
Adverse impact analysis has always been pretty straight forward to
me. I am aware that other methods exist, but I have always
used the "Four-Fifths or 80% Rule" to determine the presence of a hiring
system's adverse impact against minorities or women.
It is a good idea to view the Uniform Guidelines on Employee Selection Procedures:
"A selection rate for any race, sex, or ethnic group which is less than four-fifths (4/5) (or eighty percent) of the rate for the group with the highest rate will generally be regarded by the Federal enforcement agencies as evidence of adverse impact, while a greater than four-fifths rate will generally not be regarded by the Federal enforcement agencies as evidence of adverse impact".

In this example 64 males took a test and 16 passed while 17 women took the test and 3 passed. So the passing rates were 20% for males and 15% for females. Is the 5% difference enough to signal adverse impact?
The answer is yes: 15 / 20 = 75% or three quarters. The Four-Fifths
rule says that if it's less than 80% (i.e., four-fifths) then you've got
evidence of adverse impact.
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