The four fifths rule is a US rule of thumb for spotting adverse impact in hiring. If one group's selection rate is less than 80 percent of the rate for the group with the highest selection rate, federal enforcement agencies generally treat that as evidence of adverse impact.
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A US rule of thumb: if one group's selection rate is less than 80% of the highest group's rate, that is a sign of adverse impact.
The rule comes from the Uniform Guidelines on Employee Selection Procedures, adopted in 1978 by federal agencies including the EEOC. It applies to any selection step, such as a resume screen, a test, an interview stage or an AI ranking tool, and compares groups by race, sex or ethnicity.
It is a screening guide, not a final legal test. The Guidelines say smaller differences can still count as adverse impact if they are statistically and practically significant, and larger differences may not count when they rest on small numbers. Statistical tests are often used alongside it.
Finding adverse impact does not automatically mean a practice is illegal, but the employer may need to show the step is job related and consistent with business necessity. This is general information, not legal advice.
Formula: Impact ratio = selection rate of a group divided by selection rate of the group with the highest rate. A ratio below 0.8 (four fifths) suggests possible adverse impact.
Why it matters to recruiters
Recruiters own many of the steps where adverse impact shows up, and AI screening tools can create it at scale. Running the four fifths check on each stage of your funnel is a simple way to catch problems early, ask vendors better questions and avoid defending a process you never measured.
An example from a recruiting desk
An AI resume screen passes 60 of 100 male applicants (60 percent) and 40 of 100 female applicants (40 percent). The impact ratio is 40 divided by 60, or about 0.67, which is below 0.8. The TA team pauses the automatic screen, asks the vendor which factors drive the gap and has recruiters review the screened out applicants manually.
Tips that help
Run the check at every funnel stage, not only at final hire.
Ask AI vendors for adverse impact results on data like yours.
Use statistical tests as well when numbers are large or very small.
Document what you checked, what you found and what you changed.
Mistakes to avoid
Treating a ratio above 0.8 as proof that a process is fair.
Drawing firm conclusions from very small numbers of applicants.
Frequently asked questions
Is the four fifths rule a law?
It is a guideline in the federal Uniform Guidelines on Employee Selection Procedures, used by enforcement agencies as a practical test. Courts and agencies also look at statistical significance and other evidence.
Does the four fifths rule apply to AI hiring tools?
The Guidelines apply to selection procedures, and an AI screen or ranking tool used to decide who moves forward is a selection procedure. Some local AI laws also require impact ratios in bias audits.
What should I do if a step fails the four fifths rule?
Look at the cause, check whether the step is truly job related, consider alternatives with less impact, and get legal advice. Do not simply ignore or quietly adjust results.
