Definition
Adverse impact — Adverse impact is when a hiring practice or selection procedure, applied the same way to everyone, produces a meaningfully different selection rate for one protected group compared to another. It's distinct from disparate treatment, which involves intentionally treating candidates differently based on a protected characteristic. Adverse impact can occur even when a practice is applied identically to every candidate and no one involved intended any discriminatory effect; the concern is the outcome, not the intent behind the rule. A common example is a physical fitness test or a specific credential requirement that, while applied evenly, screens out a disproportionate share of one group relative to others. It's typically identified statistically, by comparing the rate at which different groups pass through a given stage of the hiring process, most commonly using a guideline like the four-fifths rule as an initial screening threshold.
Adverse impact analysis is why employers, particularly larger ones, track selection rates by group at each stage of hiring: application, screening, interview, and offer.
A single stage showing a large gap between groups doesn't automatically mean a legal problem exists, since a job-related and consistent business necessity can justify a practice even with an uneven pass rate, but it's a signal that warrants a closer look at whether the criteria being used are actually necessary for the role.
Frequently asked questions
Is adverse impact the same as intentional discrimination?
No. Intentional discrimination, also called disparate treatment, involves deliberately treating candidates differently. Adverse impact can occur from a neutral practice applied evenly to everyone, with no discriminatory intent, based purely on the outcome it produces.
Does adverse impact automatically mean a hiring practice is illegal?
Not automatically. A practice showing adverse impact can potentially be justified if it's job-related and consistent with business necessity, though this is a legal determination that depends on the specific facts and should involve counsel.
How do employers typically screen for adverse impact?
By comparing selection rates across candidate groups at each stage of the hiring process, often using the four-fifths rule as an initial statistical benchmark before looking more closely at any stage showing a gap.
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