Adverse impact
Also called disparate impact
A substantially different rate of selection for a protected group that results from a neutral-seeming employment practice, regardless of whether anyone intended it.
Last reviewed
In practice
Intent is not part of the definition, which is the single most misunderstood thing about it. A requirement applied identically to everyone can still produce adverse impact, and the fact that nobody meant to exclude anyone is not a defence.
The usual first test is the four-fifths rule: compare each group’s selection rate to the highest group’s, and a ratio below 0.8 is evidence requiring justification. Justification generally means showing the requirement is job-related and consistent with business necessity.
Adverse impact concentrates at stages rather than spreading evenly. Measuring it in aggregate across a whole funnel routinely hides a single stage that is producing all of it.
Not to be confused with
- Disparate treatment
- Disparate treatment is deliberately treating someone differently because of a protected characteristic. Adverse impact is a neutral practice producing an unequal outcome. Both are unlawful in many jurisdictions; only the second can happen entirely by accident.
Related
Four-fifths rule
A screening test for adverse impact: if a group’s selection rate is less than four-fifths of the highest group’s selection rate, that is evidence of adverse impact requiring investigation.
Selection rate
The proportion of candidates from a given group who pass a particular stage of a hiring process.
Bias audit
An assessment of whether a hiring tool produces different selection rates across protected groups, performed by a party independent of the tool’s vendor.
How CalHire handles this: AI governance, bias auditing and the audit trail