What analytical step must HR take to prevent discrimination lawsuits before finalizing a RIF?

• A. HR must conduct a cost-benefit analysis to optimize severance.
• B. HR must conduct a market analysis to set salaries.
• C. HR must conduct a legal audit of contracts.
• D. HR must conduct an Adverse Impact analysis to ensure selection criteria do not disproportionately target a specific protected class.

Answer: (D)

Preventing discrimination lawsuits in a RIF hinges on ensuring the criteria used to decide who is laid off does not systematically disadvantage protected groups. An Adverse Impact analysis looks at the real-world effects of those criteria on different protected classes. It goes beyond whether the criteria are legally compliant on their face and asks whether the chosen method produces disproportionate layoffs for any group.

This analysis typically involves examining how the layoff selections would affect representation among protected classes and may use statistical benchmarks like the 4/5ths rule to flag potential disproportional impact. If adverse impact is found, HR should adjust the criteria to be more neutral, add or weight additional criteria to balance the effect, or explore alternatives such as reassignments or phased layoffs, all while documenting decision rationales to defend against challenges.

Other options like cost-benefit analysis, market analysis for salaries, or a legal audit of contracts don’t specifically address whether the layoff criteria will disproportionately affect a protected class, so they’re less effective for preventing discrimination claims in a RIF.