The 80% Rule
The 80% Rule, also known as the “four-fifths rule,” is a benchmark used to identify potential disparate impact in employment practices. It was originally framed by a panel of 32 professionals assembled by the State of California Fair Employment Practice Commission (FEPC) in 1971.
This rule presumes adverse impact if the selection rate for a protected group is less than 80% of the rate for the group with the highest selection rate. The EEOC and other federal agencies use this rule as an initial screening tool for identifying potential discrimination.
Key aspects of the 80% Rule include:
- It serves as a commonly used benchmark for identifying potential disparate impact.
- The rule is not a definitive legal standard; courts may find disparate impact even if the 80% threshold is not crossed.
- Employers should use the 80% Rule as an initial diagnostic tool when evaluating their employment practices.
- Understanding the application of this rule helps employers identify potential liability before it results in litigation.
By applying the 80% Rule, employers can proactively assess their employment practices and make necessary adjustments to mitigate the risk of disparate impact claims.
Common Workplace Practices with Disparate Impact Risk
Credit checks, while a common practice, can lead to disparate impact issues if not managed properly. Employers must be aware of the potential risks associated with using credit history screenings in employment decisions.
