Updated February 19, 2026
Disparate Impact vs Disparate Treatment: What Employers Must Know
Distinguishing between disparate impact vs disparate treatment might seem like a legal technicality, but for California employers, misunderstanding these concepts can lead to costly discrimination lawsuits and significant liability. As we approach 2026, the distinctions between these two forms of workplace discrimination are becoming increasingly important in California's evolving employment law landscape.
While both concepts fall under discrimination law, they operate in fundamentally different ways. Disparate treatment involves intentional discrimination where an employer treats an employee differently based on a protected characteristic. However, disparate impact occurs when seemingly neutral policies disproportionately affect protected groups, regardless of intent. Furthermore, California's Fair Employment and Housing Act (FEHA) provides broader protections than federal law, making compliance particularly challenging for employers in the state.
This guide examines the critical differences between disparate impact and disparate treatment, specifically focusing on what California employers need to understand to stay compliant with the law in 2026. You'll learn how courts evaluate each type of discrimination, what constitutes a protected class in California, and most importantly, practical steps to review your workplace policies and practices to prevent potential discrimination claims.
Understanding Disparate Treatment
At its core, disparate treatment occurs when an employer intentionally treats an individual differently based on their membership in a protected class. This form of discrimination represents unequal behavior toward someone because of protected characteristics such as race, gender, religion, national origin, or age.
Definition and legal basis
Disparate treatment discrimination takes place when employees who belong to protected classes are treated differently specifically because of their protected status. Unlike other forms of discrimination, disparate treatment focuses on intentional actions or decisions that disadvantage certain groups. Title VII of the Civil Rights Act of 1964 explicitly prohibits employers from treating applicants or employees differently because of their membership in a protected class.
The legal foundation for disparate treatment claims rests on the principle that employers cannot make employment decisions motivated—in whole or in part—by race, sex, or another protected characteristic. Moreover, Title VII bars discrimination in hiring, firing, compensation, or any term, condition, or privilege of employment.
Essentially, the presence of a discriminatory motive can be inferred from differences in treatment between similarly situated individuals. For instance, when people of different races or genders receive different treatment in similar employment situations, it creates a reasonable inference that discrimination has occurred.
Examples of intentional discrimination
Intentional discrimination manifests in numerous workplace scenarios. First, consider a manager who consistently promotes younger employees over older, equally qualified candidates based solely on their age. Alternatively, an employer might provide advanced training opportunities only to employees of a certain race, excluding others who are equally qualified.
Additionally, discrimination appears in salary negotiations when female candidates routinely receive lower starting salaries compared to similarly qualified male candidates. Another common example involves employers who only promote white employees to supervisory positions or require pre-employment drug tests exclusively for applicants of a specific race.
Discrimination also surfaces when employers deny religious leave requests without consideration or when workplaces maintain informal networks that systematically exclude people of color or women from important social connections necessary for career advancement.
How intent plays a role in proving treatment
Intent stands as the central element distinguishing disparate treatment from other forms of discrimination. To establish a case, plaintiffs must demonstrate that the employer's actions stemmed from discriminatory intent. This can be challenging since direct evidence of discrimination is rarely available—most employers don't openly admit to discriminatory practices.
Consequently, courts recognize that plaintiffs can prove discrimination through indirect or circumstantial evidence. To establish a prima facie case of disparate treatment, an employee typically needs to show:
- They belong to a protected class
- They met qualifications for a job benefit (such as hiring, promotion)
- Despite qualifications, they were denied the benefit
- The benefit remained available or was given to someone not in their protected class
Once this initial case is established, the burden shifts to the employer to provide a legitimate, non-discriminatory reason for their decision. The employee must then prove this reason is merely an excuse for discrimination.
The courts have established that discriminatory motive can be inferred from suspicious timing, ambiguous statements, behavior toward others in the protected group, or systematically better treatment of those outside the protected class.
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Understanding Disparate Impact
Unlike its counterpart, disparate impact occurs without intentional discrimination, yet its effects can be just as harmful in the workplace. This concept focuses on outcomes rather than motivations, making it a vital area for California employers to understand thoroughly.
Definition and how it differs from treatment
Disparate impact discrimination refers to facially neutral employment practices that disproportionately affect members of protected classes, even without discriminatory intent. In contrast to disparate treatment, which centers on intentional discrimination, disparate impact addresses unintended consequences of seemingly neutral policies.
First of all, this form of discrimination happens when workplace policies appear unbiased on the surface but create adverse effects on protected groups in practice. The key distinction lies in the approach to intent – disparate treatment requires proving discriminatory motivation, whereas disparate impact focuses solely on the discriminatory outcome.
Most compelling evidence shows that disparate impact theory originated in the landmark Supreme Court case Griggs v. Duke Power Co. in 1971, where the Court held that employment policies resulting in significant racial disparities could be discriminatory without proof of intent. This decision established that a high school diploma requirement disproportionately excluded African Americans from the workforce, recognizing that 34% of white men had finished high school compared to only 12% of Black men at that time.
Examples of neutral policies with unfair effects
Notably, several common workplace practices can create disparate impact:
- Pre-employment testing that disproportionately screens out certain protected groups
- Credit history checks that adversely affect applicants from particular racial or economic backgrounds
- Physical ability requirements that exclude more women or people with disabilities
- Height requirements that disproportionately exclude women or certain ethnic groups
- Mandatory weekend work policies that impact employees with religious observances
- Educational requirements like bachelor's degrees that may exclude certain racial groups (in New Mexico, 41% of non-Hispanic white adults meet this requirement compared to only 11% of Native American adults)
In fact, the Equal Employment Opportunity Commission has identified specific practices likely to cause disparate impact, including background checks examining arrest and conviction history, credit and financial history reviews, and physical ability tests measuring strength or stamina.
Why intent is not required to prove impact
Given that disparate impact focuses on outcomes rather than intentions, employees need not demonstrate an employer's discriminatory motive. As opposed to disparate treatment claims, which require proving intentional discrimination, disparate impact allows employees to challenge workplace discrimination by showing statistical disparities.
To establish a prima facie case of disparate impact discrimination, employees must demonstrate that a particular employment policy or practice has caused a significant statistical disparity in employment opportunities for protected class members. After showing these disparities, the legal burden shifts to the employer.
At this point, the employer must prove either that the challenged practice doesn't actually cause disparate impact or that the practice, despite causing disparate impact, is job-related and consistent with business necessity. If the employer successfully demonstrates business necessity, the burden shifts back to the plaintiff, who may overcome this defense by proving an alternative practice exists that would serve the employer's stated purpose equally well without resulting in disparate impact.
This burden-shifting framework makes disparate impact claims particularly important for addressing systemic discrimination that might otherwise continue unchallenged due to the difficulty of proving discriminatory intent.
Key Differences Between Disparate Treatment and Impact
The fundamental distinction between disparate impact vs disparate treatment lies in the presence or absence of intent. Though both concepts address workplace discrimination, they function through entirely different legal frameworks.
Intentional vs. unintentional discrimination
The law recognizes both intentional and unintentional forms of discrimination. Disparate treatment is often referred to as "intentional discrimination". It occurs through deliberate actions that directly discriminate based on an employee's membership in a protected class. For instance, drug testing only minority job applicants exemplifies disparate treatment.
Alternatively, disparate impact, sometimes called "adverse impact," represents "unintentional discrimination". This occurs when neutral employment policies or practices disproportionately affect protected classes. Typically, these policies appear unbiased but result in negative consequences for particular groups. An example would be implementing physical fitness requirements that disproportionately exclude women when such tests don't accurately measure job aptitude.
How courts evaluate each type
Courts assess these discrimination types through distinctly different lenses. For disparate treatment claims, courts focus primarily on the employer's actions and motives. They examine whether differential treatment occurred and if discriminatory intent was present. Throughout this process, courts may consider comparative evidence showing differences in treatment between similarly situated individuals.
Regarding disparate impact cases, courts concentrate on statistical evidence and the effects of policies rather than intent. They analyze whether policies create disproportionate negative outcomes for protected groups. Justice Kennedy noted that "a disparate impact claim that relies on a statistical disparity must fail if the plaintiff cannot point to a defendant's policy or policies causing that disparity".
Burden of proof in each case
The burden of proof varies significantly between these discrimination types. In disparate treatment cases, plaintiffs must establish that the employer's actions stemmed from discriminatory intent. The burden initially falls on the claimant to demonstrate membership in a protected class, that the employer knew this, and that similarly situated employees outside the protected class received better treatment.
Conversely, for disparate impact claims, plaintiffs need not prove discriminatory intent. Instead, they must provide statistical evidence showing a disproportionate effect on a protected group. According to the Supreme Court, this statistical analysis requirement creates "a very high bar to meet". If successful, the burden shifts to the employer to demonstrate the practice is "job-related and consistent with business necessity". Should the employer establish business necessity, plaintiffs can still prevail by proving an alternative practice exists that would serve the employer's purpose without disparate impact.
California Laws Employers Must Follow
California stands at the forefront of employee protection with its extensive anti-discrimination framework. For employers navigating disparate impact vs disparate treatment claims, understanding the state's unique legal landscape is crucial for maintaining compliance and avoiding liability.
Overview of FEHA and Title VII
The California Fair Employment and Housing Act (FEHA) serves as the state's primary anti-discrimination statute, enforced by the California Civil Rights Department (CRD). In comparison with Title VII of the federal Civil Rights Act, FEHA offers substantially broader protections. First of all, FEHA applies to employers with five or more employees, whereas Title VII only covers those with 15 or more employees. Furthermore, FEHA provides more comprehensive protections against workplace discrimination, harassment, and retaliation.
For cases involving disparate impact or treatment, this jurisdictional difference means many more California employers face potential liability under state law than would under federal statutes alone. Additionally, FEHA's enforcement mechanisms often provide employees with more favorable procedural pathways and remedies than federal alternatives.
Protected classes under California law
California recognizes an extensive list of protected characteristics that surpass federal protections. The state currently protects individuals based on:
- Race, color, and national origin
- Religion (including religious dress and grooming practices)
- Sex/gender (including pregnancy, childbirth, breastfeeding)
- Gender identity and gender expression
- Sexual orientation and reproductive health decisionmaking
- Age (40 and over)
- Physical and mental disabilities (including HIV/AIDS and cancer)
- Medical conditions and genetic information
- Marital status
- Military or veteran status
- Ancestry
Henceforth, employers must recognize that neutral policies affecting any of these groups could trigger disparate impact claims, even without discriminatory intent.
Recent updates for 2026
Effective October 1, 2025, new FEHA regulations will govern employers' use of artificial intelligence and automated decision systems in employment practices. These regulations prohibit using automated tools in ways that result in discrimination, regardless of whether they're developed by third-party vendors.
Beginning January 1, 2026, California's equal pay law will broaden its scope by replacing binary gender references with inclusive language. Accordingly, employers are prohibited from paying employees of "another sex" (not just the "opposite sex") less for substantially similar work. The statute of limitations for equal pay claims will extend to three years, with recoverable back pay for up to six years.
By February 2026, all employers must provide annual written notices of workplace rights, including anti-discrimination protections. The Labor Commissioner will issue model notices in multiple languages.
These developments signal California's ongoing commitment to expanding protections against both intentional discrimination and policies with discriminatory effects.
How Employers Can Stay Compliant
Proactive compliance measures can shield California employers from costly disparate impact vs disparate treatment claims. Implementing systematic strategies not only protects organizations legally but fosters equitable workplaces.
Reviewing and updating policies
Regular policy audits identify potential discrimination risks before they escalate. Employers should evaluate whether policies are inclusive and address diverse employee needs. Clear anti-discrimination guidelines should explicitly prohibit discrimination based on all protected characteristics while providing practical definitions of prohibited conduct. Comprehensive policies must cover both intentional discrimination and practices with unintended discriminatory effects. Furthermore, documentation of policy distribution proves employees received proper notification.
Conducting adverse impact analysis
Adverse impact analysis compares selection rates between different groups to identify potential disparities. This statistical evaluation should be performed anytime an organization makes significant employment decisions. The technical purpose of this analysis is determining if meaningful differences exist in selection rates between protected groups. Moreover, conducting this assessment before implementing reductions in force allows employers to review selection procedures while changes remain possible. Although adverse impact indicators don't automatically signify discrimination occurred, they highlight areas requiring further examination.
Documenting business necessity
When policies create disparate impact, employers must demonstrate business necessity. This requires establishing that requirements are reasonably related to job duties and essential for performance. For educational requirements, documentation must show why employees without specific degrees couldn't adequately perform the position. Experience requirements may be justified by showing skills develop over time, or that client retention depends on employees' proven track records. Job requirements must be carefully evaluated—overly restrictive criteria face greater scrutiny.
Training HR and managers
Effective training ensures all managers understand anti-discrimination laws and consistently enforce company policies. Training programs should include:
- Clear explanations of both disparate treatment and disparate impact concepts
- Procedures for recognizing and responding to reasonable accommodation requests
- Protocols for investigating discrimination complaints
- Guidance on avoiding retaliation against employees who report discrimination
Managers should be trained to spot potential issues early, before they become legal concerns.
Responding to employee complaints
When discrimination complaints arise, prompt, thorough, and impartial investigation is crucial. The investigation process should include interviewing the complainant, alleged harasser, and witnesses while maintaining confidentiality. During this period, separating the complaining employee from the alleged harasser minimizes further issues. Upon finding evidence of discrimination, employers must take immediate corrective action proportionate to the offense—potentially including disciplinary measures, policy changes, or additional training.
Conclusion
Understanding the distinction between disparate impact and disparate treatment has become essential for California employers facing an increasingly complex legal landscape. Disparate treatment claims require proving intentional discrimination, whereas disparate impact focuses solely on the discriminatory effects of seemingly neutral policies, regardless of intent. This fundamental difference shapes how each type of discrimination must be addressed within your organization.
California's Fair Employment and Housing Act offers substantially broader protections than federal laws, covering more employers and recognizing an extensive range of protected characteristics. Therefore, employers must remain vigilant about both intentional discrimination and policies that might disproportionately affect protected groups. The upcoming 2026 changes, particularly regarding AI in employment decisions and expanded equal pay protections, will demand even greater attention to potential discrimination risks.
Proactive measures represent your best defense against costly discrimination claims. Regular policy audits, thorough adverse impact analyzes, and proper documentation of business necessity provide crucial protection. Additionally, comprehensive training ensures managers understand anti-discrimination laws and can consistently enforce company policies. Employers who promptly investigate complaints and take appropriate corrective action demonstrate their commitment to maintaining equitable workplaces.
The legal consequences of misunderstanding these concepts can be severe, yet the benefits of creating truly inclusive workplaces extend far beyond legal compliance. Companies that eliminate both intentional discrimination and unintentional disparate impacts cultivate diverse talent pools, foster innovation, and ultimately build stronger organizations. Though navigating California's employment law framework requires diligence, employers who invest in understanding these distinctions and implementing proper safeguards will be well-positioned to thrive in 2026 and beyond.
References
[1] – https://hrcalifornia.calchamber.com/hr-library/discrimination/claims-lawsuits/unequal-disparate-treatment
[2] – https://www.caseiq.com/resources/disparate-impact-treatment
[12] – https://www.eeoc.gov/laws/guidance/cm-604-theories-discrimination
[13] – https://nlihc.org/resource/us-supreme-court-upholds-fair-housing-disparate-impact-principle
[14] – https://www.americanprogress.org/article/the-truth-about-disparate-impact-and-equity/
[18] – https://www.senate.ca.gov/protected-classes
Consulting a workplace discrimination attorney will provide you with the necessary guidance and support to navigate the legal process effectively. Remember, time is of the essence, so seek legal advice promptly to maximize your chances of a successful outcome.
Call Setyan Law at (213)-618-3655 for a consultation.
