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Test for a Disparate Impact in Employment Decisions

Title VII of the Civil Rights Act of 1964, the Americans With Disabilities Act of 1990 (ADA), and the Age Discrimination in Employment Act of 1967 (ADEA) prohibit any employment practice or policy that would affect an employee, or potential employee, on a protected basis of age, sex, national origin, color, religion, race or disability. An employer or a potential plaintiff can test for disparate impact by using a simple mathematic calculation that can be used as initial proof of discrimination.

Calculating Disparate Impact

Determine the pool of comparator employees. For example, if you are testing for disparate impact on the basis of sex for a group of employees where 100 men and 100 women applied for the same promotion, then the pool would be 200 employees.

Identify how many of each protected basis was given a beneficial term, condition or privilege of employment. Using our example above, let's say 80 of the men were selected for promotion, but only 60 of the women were selected for promotion.

Calculate the percentage of those given the beneficial employment decision by dividing the number of recipients of each basis by the total of the same basis. From the example above, 80 out of 100 men were promoted, so 80 percent of men; and 60 of 100 women were promoted, or 60 percent of women.

Divide the smaller percentage basis group by the larger percentage basis group to determine the ratio between the two bases. For example, 60 percent of women divided by the 80 percent of men creates a ratio of 75 percent.

If the ratio between the two groups is less than 80 percent, or four-fifths, then the employment action failed the test for disparate impact. Therefore, from our example above, since the ratio of women promoted was 75 percent of the ratio of men promoted, this promotion action had a disparate impact on the basis of sex.

Note, this is only an initial test set forth by the U.S. Department of Justice, The Equal Employment Opportunity Commission, and the Department of Labor under the Uniform Guidelines for Employment Selection Procedures. An employment action failing the four-fifths test does not mean there was discrimination, only that federal enforcement agencies will give closer scrutiny to employment actions that fail this calculation.



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