Adverse Impact
Last updated: June 30, 2026
Quick definition
Adverse impact (also called disparate impact) occurs when an employment selection method passes or advances candidates from a protected group at a rate below four-fifths (80%) of the rate for the highest-passing group. It is a legal standard in US employment law and a fairness metric in structured hiring internationally.
How it works
The four-fifths rule is the standard US EEOC/OFCCP threshold: if the pass rate of any protected group (by race, sex, national origin, religion, or age) is less than 80% of the pass rate of the highest-passing group, the selection procedure has adverse impact and requires validation. For example, if 70% of Group A candidates advance past a screening stage but only 50% of Group B candidates advance, the ratio is 50/70 = .71, below the .80 threshold, which constitutes adverse impact.
Why structured interviews reduce adverse impact risk
Unstructured interviews are more susceptible to affinity bias and in-group favoritism, which disproportionately disadvantage candidates from underrepresented groups. Structured interviews apply the same questions and the same rubric to every candidate, reducing the variance introduced by individual interviewer judgment. Research by Huffcutt and Roth (1998) found that structured interviews have lower adverse impact against racial minorities than unstructured ones, while maintaining higher predictive validity.
Adverse impact and AI hiring tools
AI selection tools are subject to adverse impact analysis under the same legal framework. The EEOC Uniform Guidelines on Employee Selection Procedures (1978) apply to any selection procedure, including AI-scored assessments. Employers who use AI screening must conduct regular adverse impact analyses by demographic group and retain records to demonstrate compliance. New York City Local Law 144 (effective 2023) requires bias audits and public disclosure for automated employment decision tools used in NYC.