Disparate Impact Calculator

Disparate impact analysis is used in hiring, promotions, and other employment practices to identify whether policies disproportionately affect one group over another, even if the policies are neutral on the surface.

Historical Background

The concept of disparate impact originated from the U.S. Civil Rights Act of 1964 and was further defined by the Supreme Court in the 1971 case Griggs v. Duke Power Co.. The ruling established that employment practices that have a disproportionate adverse effect on a protected group, even without discriminatory intent, can violate anti-discrimination laws.

Calculation Formula

The calculation for disparate impact involves comparing the selection rates of two groups (e.g., different races or genders). The formula is:

\[ \text{Disparate Impact Ratio} = \frac{\text{Selection Rate of Group 1}}{\text{Selection Rate of Group 2}} \]

If the ratio is less than 0.8 (or 80%), disparate impact is typically considered to exist.

Example Calculation

If Group 1 (e.g., male applicants) has a selection rate of 50% and Group 2 (e.g., female applicants) has a selection rate of 70%, the disparate impact ratio is:

\[ \text{Disparate Impact Ratio} = \frac{50}{70} = 0.714 \]

Since 0.714 is less than 0.8, there would be evidence of disparate impact.

Importance and Usage Scenarios

Disparate impact analysis is critical in ensuring compliance with equal employment opportunity laws. Employers, legal teams, and human resources departments use these calculations to evaluate hiring practices, promotional decisions, and other employment activities to prevent unintentional discrimination. It is also vital for avoiding lawsuits or regulatory penalties related to discriminatory practices.

Common FAQs

1. What is disparate impact?

   • Disparate impact refers to employment or other practices that disproportionately affect one group more than another, even if the practices are seemingly neutral.

2. How is disparate impact measured?

   • It is measured by comparing the selection rates of two groups. If the ratio is below 0.8, there is a possibility of disparate impact.

3. What happens if disparate impact is found?

   • Employers may need to revise their practices or demonstrate that the policy is necessary and based on job-related criteria or business necessity.

4. What is the 80% rule?

   • The 80% rule is a guideline stating that if the selection rate for one group is less than 80% of the rate for another group, there may be evidence of disparate impact.

This calculator simplifies the process of checking for disparate impact, making it a valuable tool for businesses and legal professionals.