1. What is Adverse Impact Ratio?

The Adverse Impact Ratio (IR) compares the selection rate of a protected group to that of a non-protected group in employment decisions like layoffs. In California, a ratio less than 0.80 (the "four-fifths rule") may indicate potential discrimination.

2. How Does the Calculator Work?

The calculator uses the Adverse Impact Ratio formula:

Where:

• \( Protected Group Rate \) — Percentage of protected group members affected by layoff
• \( Non-Protected Group Rate \) — Percentage of non-protected group members affected by layoff

Explanation: The ratio measures whether protected groups (based on race, gender, age, etc.) are being disproportionately affected by layoff decisions.

3. Importance of Impact Ratio

Details: California employers must monitor adverse impact to comply with fair employment laws. Regular analysis helps identify potential discrimination risks before they become legal issues.

4. Using the Calculator

Tips: Enter both rates as percentages (e.g., 10 for 10%). The protected group rate should be the percentage of that group laid off, and similarly for the non-protected group.

5. Frequently Asked Questions (FAQ)

Q1: What is considered a problematic ratio?
A: Ratios below 0.80 (four-fifths rule) may indicate adverse impact, though courts consider additional factors.

Q2: Which groups are protected in California?
A: Protected classes include race, color, religion, sex, national origin, age (40+), disability, and more under FEHA.

Q3: Is this calculator specific to layoffs?
A: While designed for layoffs, the same calculation applies to hiring, promotions, and other employment decisions.

Q4: What if both rates are very small?
A: Small numbers can produce misleading ratios. Statistical significance tests may be needed in such cases.

Q5: Does a ratio below 0.80 prove discrimination?
A: No, it only indicates potential adverse impact. Employers can justify disparities with business necessity.