1. What is Adverse Impact in Termination?

Adverse impact occurs when employment decisions (like terminations) disproportionately affect members of a protected group. The Impact Ratio (IR) compares termination rates between minority and majority groups to identify potential discrimination.

2. How Does the Calculator Work?

The calculator uses the Impact Ratio formula:

Where:

• Termination Rate = (Number Terminated / Total in Group) × 100
• IR < 0.8 typically indicates adverse impact (80% rule)
• IR ≥ 0.8 suggests no substantial adverse impact

Explanation: The 80% rule (or four-fifths rule) is a guideline for identifying potentially discriminatory practices in employment decisions.

3. Importance of Impact Ratio

Details: Calculating IR helps organizations identify potential discrimination in termination practices, comply with EEOC guidelines, and promote fair employment practices.

4. Using the Calculator

Tips: Enter the number of terminated employees and total employees for both minority and majority groups. All values must be positive integers.

5. Frequently Asked Questions (FAQ)

Q1: What constitutes a minority group?
A: Typically groups protected by anti-discrimination laws (race, gender, age, religion, disability status, etc.).

Q2: What is the 80% rule?
A: If the selection rate for a protected group is less than 80% of the rate for the majority group, this may indicate adverse impact.

Q3: Is adverse impact the same as discrimination?
A: No, it suggests possible discrimination but requires further investigation into legitimate business reasons for the disparity.

Q4: What if my IR is exactly 0.8?
A: This is the threshold value. Values below 0.8 warrant closer examination of termination practices.

Q5: How often should we calculate this?
A: Regular monitoring (e.g., annually or quarterly) helps identify trends and address issues proactively.