1. What is Impact Ratio?

The Impact Ratio (IR) compares the termination rates between minority and majority groups to assess potential adverse impact in employment decisions. It's a key metric in equal employment opportunity (EEO) analyses.

2. How Does the Calculator Work?

The calculator uses the Impact Ratio formula:

Where:

• \( \text{Minority Termination Rate} \) — Percentage of minority group members terminated
• \( \text{Majority Termination Rate} \) — Percentage of majority group members terminated

Interpretation: An IR below 0.8 (80%) may indicate adverse impact according to the "four-fifths rule" commonly used in EEO compliance.

3. Importance of Impact Ratio

Details: Calculating impact ratios helps organizations identify potential discrimination in termination practices and ensure compliance with equal employment opportunity laws.

4. Using the Calculator

Tips: Enter both termination rates as percentages (e.g., 10.5 for 10.5%). Majority rate must be greater than zero for calculation.

5. Frequently Asked Questions (FAQ)

Q1: What is considered a problematic IR?
A: Generally, an IR below 0.8 may indicate adverse impact, though context matters. Statistical significance should also be considered.

Q2: How are termination rates calculated?
A: Termination rate = (Number of terminations in group) / (Total employees in group) × 100

Q3: What groups should be compared?
A: Typically compares protected classes (race, gender, age) to non-protected counterparts in similar job categories.

Q4: Is the four-fifths rule a legal standard?
A: It's a rule of thumb from EEOC guidelines, not a strict legal threshold. Other factors may be considered in discrimination cases.

Q5: What if my IR is below 0.8?
A: Consult with HR or legal professionals to review your termination practices and documentation for potential issues.