Adverse impact | Meaning and Definition

What is Adverse impact?

Adverse impact refers to the use of seemingly neutral terms of employment or policies in a company, which can have a negative impact. Some examples of this impact on employment can be found in job descriptions, assessments of an employee’s performance, and the questions that the employers may ask potential employees.

Discriminatory provisions of any form are covered under adverse impact. Any provision in the policies or requirements that exclude a certain group of people based on age, gender, religion, race, or any other criteria is covered under this impact.

These practices are prohibited, and employers need to ensure they do not do any of these things in their hiring procedure. Conducting tests unrelated to the job comes under the purview of this impact. 

The Role of the Equal Employment Opportunity Commission

The Equal Employment Opportunity Commission (EEOC) is a US department that works to prevent discrimination in employment opportunities. The EEOC works with several state and federal agencies, advocates, and other groups of people to ensure that even unintentionally occurring adverse impact practices can be prohibited. It lays down the standard for determining and concluding whether a particular practice has an adverse impact. Cases are usually class action suits against a corporation, filed by several employees against a long-standing policy of the corporation, which is discriminatory against employees and potential employees. 

Consequences of Adverse Impact

It has a lot of very serious consequences affecting talented individuals. When discriminatory practices are used to prevent a potential employee from being considered for a job position on equal grounds, it not only means wastage of time, but even the business stands the chance of losing a potentially skilled employee.