The short answer
The four-fifths rule, also called the 80 percent rule, says a selection rate for any race, sex or ethnic group that is less than four-fifths (80%) of the rate for the group with the highest rate "will generally be regarded by the Federal enforcement agencies as evidence of adverse impact." It comes from the Uniform Guidelines on Employee Selection Procedures, 29 CFR 1607.4(D). Employers and auditors use it as the first screen for whether a test, interview or AI tool treats groups unevenly.
How the four-fifths rule works
The math has two steps. Work out each group's selection rate (selected divided by applicants), then divide each rate by the highest group's rate to get its impact ratio. Any ratio under 0.80 is flagged.
A quicker way to read it: multiply the highest selection rate by 0.8. That is your line. Any group whose rate falls below it is flagged under the rule.
Example
Say an AI resume screen reviewed 300 men and 180 women for a support role and moved 120 men and 54 women to the interview stage (illustrative numbers):
The line is 40% x 0.8 = 32%. Women advanced at 30%, below the line, so the screen is flagged for adverse impact against women. Had 60 women advanced (33.3%), the ratio would be 0.83 and the rule alone would not flag it.
Common mistakes
- Treating it as a legal test. The EEOC's Q&A says the rule "is not intended as a legal definition." It is a practical way to focus attention on serious gaps and to ask for more information.
- Treating 80% as a pass mark. The Guidelines say smaller differences can still be adverse impact when they are significant in both statistical and practical terms. The EEOC adds that the rule does not mean it tolerates "up to 20% discrimination."
- Ignoring sample size. Bigger gaps may not count when they rest on small, statistically insignificant numbers. The EEOC explains it relies on the rule partly because significance tests often can't confirm real differences in small samples.
- Checking only the total. Run it on the whole process first, then on each step that shows a problem.
Four-fifths rule vs NYC impact ratios
New York City's Local Law 144 audit rules require impact ratios for sex, race/ethnicity and intersectional categories and say the calculations are consistent with 1607.4. But the city sets no pass mark: its FAQ says the law does not require any specific action based on the results. Auditors and employers often still read those ratios against 0.80. For how this shows up in vendor reports, see our guide to AI bias audits and our Local Law 144 guide.
Related terms
- Adverse impact: the disparity the four-fifths rule is meant to flag.
- Impact ratio: the number you compare with 0.80.
- Selection rate: the input to every impact ratio.
- Bias audit: an independent review that reports these ratios for a tool.
- Automated employment decision tool: the NYC term for tools that need a yearly audit.
Questions
What is the 80 percent rule in hiring?
It is another name for the four-fifths rule. If a group's selection rate is less than 80% of the rate of the group with the highest rate, federal enforcement agencies generally treat that as evidence of adverse impact.
Is failing the four-fifths rule illegal?
Not by itself. The EEOC calls it a rule of thumb, not a legal definition. A ratio under 0.80 indicates adverse impact, and a procedure with adverse impact must then be validated or otherwise justified, or replaced with a lawful alternative.
Does passing the four-fifths rule mean a tool is fair?
No. The Guidelines say smaller differences can still be adverse impact when they are statistically and practically significant, and the rule says nothing about whether the tool measures job-related skills well.
Want to see how a live AI interview breaks scores down so you can check ratios like these? Book a 20-minute demo, or run a sample interview on yourself.
This is not legal advice.
Sources
- eCFR: 29 CFR 1607.4, Information on impact (four-fifths rule at 1607.4(D))
- eCFR: 29 CFR 1607.16, Definitions
- EEOC: Questions and Answers on the Uniform Guidelines on Employee Selection Procedures
- NYC DCWP rules on AEDTs (6 RCNY 5-300 to 5-304), Notice of Adoption
- NYC DCWP: Automated Employment Decision Tools FAQ
