What does the four-fifths rule actually say in the Uniform Guidelines?
A United States federal enforcement guideline: a selection rate for any race, sex or ethnic group below four-fifths of the highest group's rate will generally be regarded by federal enforcement agencies as evidence of adverse impact. The same paragraph states that smaller differences may still count and larger ones may not.
Uniform Guidelines on Employee Selection Procedures, 29 CFR Part 1607, §1607.4(D) (1978). Authority: secs. 709 and 713, Civil Rights Act of 1964; 42 U.S.C. 2000e-8, 2000e-12.
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In its own words
“A selection rate for any race, sex, or ethnic group which is less than four-fifths (4/5) (or eighty percent) of the rate for the group with the highest rate will generally be regarded by the Federal enforcement agencies as evidence of adverse impact...”
“Smaller differences in selection rate may nevertheless constitute adverse impact, where they are significant in both statistical and practical terms or where a user's actions have discouraged applicants disproportionately on grounds of race, sex, or ethnic group.”
“Greater differences in selection rate may not constitute adverse impact where the differences are based on small numbers and are not statistically significant, or where special recruiting or other programs cause the pool of minority or female candidates to be atypical of the normal pool of applicants from that group.”
What it does not say
Each of these is a claim made in this market and attributed to the source above. None of them is supported by it.
Commonly claimed: That a ratio above 0.80 means a selection procedure is compliant.
The regulation says the opposite in its own next sentence: smaller differences may nevertheless constitute adverse impact where they are significant in both statistical and practical terms. Clearing four-fifths is the absence of one trigger, not a finding of lawfulness.
Commonly claimed: That a ratio below 0.80 means a procedure is unlawful.
It means federal enforcement agencies will generally regard it as evidence of adverse impact. Evidence of adverse impact opens the question of job-relatedness and business necessity; it does not close it. The verb in the regulation is 'regarded', not 'is'.
Commonly claimed: That the four-fifths rule applies wherever a company hires.
It is a United States federal enforcement convention adopted in 1978. It is widely borrowed as a monitoring heuristic in other jurisdictions and carries no legal status in them. Nothing here is legal advice; a lawyer in the relevant jurisdiction should confirm what applies.
The part that gets cut, and why it is the part that matters
Almost every summary of this paragraph reproduces the first sentence and stops. The two sentences after it are what turn a bright line into a rule of thumb in both directions — small differences can still count, large ones on tiny samples may not — and they are the reason a four-fifths ratio computed on twelve applicants should never be reported without its denominators.
Read as written, the paragraph describes a screening heuristic for enforcement attention. That is a narrower thing than the market's usual reading of it, and the narrower reading is the one that survives contact with a regulator.
How to use it without over-reading it
Compute the ratio stage by stage rather than across the whole funnel, because a funnel-level ratio can hide a single stage doing all the damage. Report group sizes alongside it every time. Pair it with a two-proportion significance test so the two questions the regulation itself distinguishes — is the gap large, is the gap more than noise — are answered separately.
Where the numbers are small, say so rather than reporting a ratio as though the sample supported it. The regulation anticipates exactly that case and declines to treat it as adverse impact on its own.
Where this source is used here
These pages argue from the source above. If it is ever superseded, these are the pages that have to change.
- Four-fifths rule
- Adverse impact ratio
- Adverse impact ratio calculator
- Differential item functioning calculator
Read next
- 42 U.S.C. §2000e-2(l) — the score-adjustment prohibition — One sentence of statute that makes the most commonly recommended fairness shortcut unlawful.
Founder of AssessAll and of Bodhih Training Solutions, a corporate training company in Bangalore. Works on assessment design, scoring and reporting across hiring, L&D and certification programmes.
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This page quotes a legal instrument and describes what it says. It is not legal advice, and it summarises one jurisdiction only. Confirm what applies to you with a qualified adviser in the relevant jurisdiction.