Every business organization is result of various policies and programs which governs its functioning such that they directly or indirectly influence the life of every individual in the organization.
Law suggests that all this framework of policies and programs must not carry a disparate impact inside or outside the organization.
What is disparate impact?
It is the theory of discrimination which holds that it is the employer’s liability to have a seemingly neutral policy regarding all matters of the organization.
It may range from policies related to recruitment, selection promotion to wage settlement or leave settlement but the events do not remains the same as desired and exclude a protected class of individuals from the scope of policies and practices. It carries a disparate impact which is prohibited by the law.
In other words a disparate impact exists when a particular policy or rule followed in an organization affects the fundamental rights of an existing or prospective employee which could otherwise turn up as a valuable asset to the business setting.
Entrance test, questions regarding height and weight of an individual during the selection process, educational requirements or the subjective procedures like interviews carries relatively higher probability of generating disparate impact.
Court Case ( From US)
Ricci v. DeStefano, 557 U.S. 557 (2009), is one amongst the widely discussed case for disparate impact.
Under this case an examination is conducted to fill the opening for captain and lieutenant in new heaven fire department the examination was administered by firefighters union. The results of the examination turned out as questionable because the pass rate of the candidates was approximately half that of the corresponding rate for white candidates as a result Rich with 16other white test takers and one Hispanic all whom passed the examination for promotions sued the city including Mayor John DeStefano, Jr where riche was the main plaintiff being a firefighter at the New Haven station for 11 years.
The court came to the conclusion that the city’s action is the violation of title VII such that the respondents cannot meet the said limit.