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Employment Selection Analysis

Under the Uniform Guidelines on Employee Selection Procedures (Part 60-3), “adverse impact” is a substantially different rate of selection in hiring, promotion, or other employment decisions, which works to the disadvantage of members of a race, sex or ethnic group.

The EEOC and the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) have adopted a rule of thumb under which they will generally determine that a selection rate for any race, gender, or ethnic group as a substantially different rate of selection. This method looks for a protected group selection rate which is less than four-fifths (4/5ths) or eighty percent (80%) of the selection rate of the group with the highest selection rate. This “4/5th” or “80%” rule of thumb is not intended as a legal definition, but is a practical means of keeping attention on serious discrepancies in rates of hiring, promotion and other selection decisions.

To assist Federal Contractors, Gerstco can conduct a confidential analysis of employment selection processes (hires, promotions, demotions, terminations and other employment decisions) for women and minorities and for each race and ethnic group, which comprise at least 2% of the relevant labor force as compared to the group with the highest selection rate (Gerstco's AAPBase software can produce any combination of sub group comparisons). The “80% Rule” is initially used to determine if there is potential “adverse impact” indicated in any of the selection processes of hires, promotions, or terminations. This means if a group’s rate of selection is less than 80% of the group with the most advantageous selection rate (hires and promotions), there may be an adverse impact. In the instance of terminations, however, if a group’s rate is more than 120% of the group with the lowest selection rate, adverse impact may exist. Where initial “adverse impact” has been shown to exist, further investigation and testing will be done to determine the cause of the impact and determine if it is statistically significant.