Disparate Impact
The term disparate impact was first used in the U.S. Supreme Court ruling on Griggs v. Duke Power Co., 401 U.S. 424, 431-2 (1971), and it refers to practices, policies, or procedures that may appear to be neutral but ultimately have an unanticipated negative impact on minority groups that are legally protected.
In many instances, disparate impact is unintentional on the part of the organization or hiring manager, but that does not reduce the impact of disparate treatment. While disparate impact often happens unintentionally, disparate treatment is usually defined as being a deliberate action.
Example:
Suppose an organization has a policy requiring that all applicants pass a credit check. This policy may exclude lower-income people from minority or underrepresented groups with members who lack the economic mobility required to build solid credit scores. In this scenario, the company’s policy may have a disparate impact on job applicants.
Related Terms
Disparate Effect
results when a person is affected by an employment practice or policy that has an adverse impact. If a legal review finds a disparate effect on compensation, hiring, termination, or advancement, the employer can face fines or penalties.
Adverse Impact
is a term that is sometimes used interchangeably with “disparate impact.” Adverse impact refers to the discriminatory effect on protected groups when biased hiring selection or promotion processes are used. With adverse impact, qualified members of minority groups are often underrepresented in a company’s workforce.
Disparate Treatment
is intentionally unfair treatment of employees or candidates who belong to legally protected minority groups. If a person feels that they have been discriminated against because of their race, sexuality, or gender, they can claim disparate treatment.