What Is the Four-Fifths Rule?
The four-fifths rule (also called the 80% rule) is a guideline from the EEOC's Uniform Guidelines on Employee Selection Procedures. It states that a selection rate for any group should be at least 80% of the selection rate for the group with the highest rate.
How to Calculate It
- Calculate the selection rate for each demographic group
- Identify the group with the highest selection rate
- Divide each group's rate by the highest rate
- If any ratio is below 0.80, adverse impact may exist
Example
If your AI screening tool advances:
- 60% of male applicants (highest rate)
- 42% of female applicants
The impact ratio = 42% / 60% = 0.70
Since 0.70 < 0.80, the four-fifths rule indicates potential adverse impact against women.
Why It Matters for AI Hiring
AI hiring tools can produce adverse impact at massive scale. A biased resume screener processing 10,000 applications per month creates far more damage than a biased human recruiter reviewing 100.
The four-fifths rule provides a straightforward, widely-accepted threshold for flagging potential discrimination that regulators, courts, and compliance officers all understand.
Limitations of the Four-Fifths Rule
The four-fifths rule is a screening tool, not a legal standard. It has known limitations:
- Small sample sizes can produce misleading ratios
- It doesn't account for statistical significance
- It examines only one characteristic at a time (missing intersectional bias)
That's why comprehensive bias audits combine the four-fifths rule with chi-squared tests, Fisher's exact tests, and intersectional analysis.
What to Do If Your AI Tool Fails
- Don't panic — failing the four-fifths rule doesn't automatically mean illegal discrimination
- Run statistical significance tests to confirm the disparity
- Examine whether the tool is job-related and consistent with business necessity
- Investigate alternative tools or approaches with less adverse impact
- Document your analysis and remediation steps
How OnHirely Applies the Four-Fifths Rule
OnHirely automatically calculates impact ratios for all protected categories at every decision stage. We combine the four-fifths rule with statistical significance testing and intersectional analysis to give you a complete picture of your AI tool's fairness profile.