What is the Four-Fifths (80%) Rule regarding Adverse Impact?

• A. The selection rate of a protected group must be at least 80% of the selection rate of the most successful group.
• B. Protected groups must be 80% represented in hires.
• C. The most successful group's rate must be 80% higher than others.
• D. No adverse impact if 80% threshold is met.

Answer: (A)

The Four-Fifths Rule is a screening method used in employment decisions to detect potential adverse impact by comparing how often protected groups are selected relative to the group with the highest selection rate. The essential point is that a protected group’s selection rate must be at least 80% of the rate of the most successful group. If the ratio falls below 0.8, it signals potential adverse impact and warrants review of the selection process. For example, if the top group has a 50% selection rate, any other protected group must have at least a 40% rate to meet the rule.

To apply it, you compute the selection rate for each group (hires divided by applicants) and identify the highest rate. The protected group must achieve at least 80% of that top rate. While meeting the 80% threshold is a helpful indicator that adverse impact is not likely, the rule is a statistical screening tool, not a final determination of discrimination, and differences can sometimes be justified by job-related factors or other context.