Dictionary: Employment Law Terms

Employment law governs the rights and responsibilities between employers and employees. It covers various issues, from hiring and firing to wages and workplace discrimination. Understanding key employment law terms is essential for employers and employees.

This dictionary defines important employment law provisions and concepts and is a handy reference guide. The definitions cover federal laws like the Fair Labor Standards Act, Title VII of the Civil Rights Act, and the Family and Medical Leave Act. It explains at-will employment, collective bargaining, severance pay, etc.

If you need to understand employment law terms, this dictionary can help.

Age Discrimination in Employment Act (ADEA). The ADEA is a federal law that protects workers ages 40 and older from workplace discrimination based on age. It bans age-related discrimination in hiring, firing, promotions, pay, and other employment practices.

Americans with Disabilities Act (ADA). The ADA is a federal law that protects employees from discrimination based on disability. Employers must make "reasonable accommodations" for their employees' disabilities.

Arbitration. A method of resolving disputes outside of court. In arbitration, parties submit their cases to a neutral third party for an often binding decision. It's widely regarded as quicker and cheaper than traditional litigation.

At-will employment. An employment relationship in which there is no contractual agreement. Either party may end the employment relationship at any time, for any reason or no reason, without incurring a penalty.

Back pay. A type of damages award in an employment lawsuit. It represents the amount of money the employee would have earned if they had not gotten fired or illegally denied a promotion.

Cafeteria plan. A type of employment benefits plan in which the employee selects benefits from a "menu" up to a specified dollar amount.

Collective bargaining. A process where employees negotiate with their employers, usually through a union representative, to reach agreements on wages, benefits, and working conditions. It results in a collective bargaining agreement governing those important employment aspects.

Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA is a federal law that requires employers to allow employees to continue their health insurance coverage after employment termination. The insurance must be at the group rate and give the same benefits.

Comparable worth. A legal concept under which people who work jobs of similar worth to the employer must get paid the same regardless of gender.

Conditions of employment. The terms and requirements that an employer and employee agree upon for their working relationship. These obligations may include work hours, compensation, benefits, job duties, and workplace policies.

Constructive discharge. Termination of the employment relationship in which the employee quits. But, the employer is liable as if a wrongful termination happened because the employee was forced to resign due to intolerable working conditions.

Common law. Legal principles derived from judicial decisions and precedent rather than statutes or regulations. It emphasizes the importance of prior court rulings in determining the outcome of current cases. Common law is the basis of the legal systems in many English-speaking countries.

Employee assistance program (EAP). A workplace program provided by the employer to help employees in recovering from drug or alcohol abuse, emotional problems, job stress, marital discord, or workplace conflict.

Employment contract. A legally binding agreement between an employer and an employee that outlines the terms and conditions of employment. It typically covers job responsibilities, compensation, benefits, and termination clauses.

Employee stock ownership plan (ESOP). An ESOP is an employer-provided benefit that allows employees to buy stock in the company under certain favorable terms.

Equal Employment Opportunity Commission (EEOC). The EEOC is the federal agency that enforces laws banning discrimination in employment.

Equal Pay Act. The Equal Pay Act of 1963 is a federal law that requires employers to pay the same to all employees who do the same work, regardless of gender.

Fair Labor Standards Act (FLSA). FLSA is a federal law that establishes minimum wage, overtime pay, recordkeeping, and child labor standards for employees.

Family and Medical Leave Act (FMLA). FMLA is a federal law that requires certain employers give time off to employees to take care of their own or a family member's illness or to care for a newborn or adopted child.

Front pay. A type of damages award in an employment lawsuit that represents the amount of money the employee would have earned if they got reinstated or hired into the higher-paying position from which they were illegally rejected.

Garnishment of wages. Seizing the amount owed from the employee's wages under a court order or other type of order.

Good faith. Good faith in employment law requires employers and employees to act honestly, fairly, and without deceit in their dealings with each other. It includes actions such as providing accurate information and honoring contractual obligations.

Hostile working environment. A workplace that is so charged with harassment or similar unwanted behavior that it interferes with one's ability to do the job and violates anti-discrimination laws. A hostile working environment is often a claim in racial discrimination and sexual harassment lawsuits.

Independent contractor. People hired to perform specific tasks or services for a client or company, usually under a contract. They aren't employees. Typically, they must pay their own taxes and benefits.

Individual retirement account (IRA). An IRA is a tax-deferred savings account in which the employee contributes no more than a set maximum amount annually.

Implied contract. A type of enforceable contract that is not made explicitly but is inferred from the circumstances or the parties' conduct.

Labor law. The body of law that governs the relationships between employers, employees, and labor unions. Labor law regulates various aspects of employment, including wages, working conditions, collective bargaining, and dispute resolution.

Layoff. The temporary or permanent termination of employment by an employer due to reasons such as economic downturns, restructuring, or lack of work. While employment has ended in a layoff, there is the possibility of rehiring in the future if conditions improve.

Minimum wage. The minimum hourly rate that employers must pay their employees. The federal minimum wage and state minimum wage often vary.

Mitigation. Mitigation is action by an employee that reduces the amount of damages resulting from an unlawful employment practice. For example, getting new employment after a wrongful termination.

National Labor Relations Act. The NLRA is a federal law that protects the rights of employees to organize and bargain collectively with their employers.

National origin discrimination. National origin discrimination is treating people unfavorably in employment decisions based on their country of origin, ethnicity, birthplace, or accent. It's banned by laws such as Title VII of the Civil Rights Act of 1964.

Noncompetition agreement. Often called a "non-compete," it's an agreement in which an employee or a former employee promises not to work for a competing employer or to set up a competing business.

Occupational disease. An illness contracted because of workplace conditions. The "black lung disease" contracted by miners is an example.

Occupational Safety & Health Administration (OSHA). OSHA is the federal agency that creates and enforces workplace health and safety standards.

Overtime compensation. A higher rate of pay that an employer must pay employees who work more than a certain number of hours in a day or week. Under federal law, the rate for overtime pay is 1.5 times the regular rate of pay.

Pension plans. Pension plans are retirement savings accounts set up by employers to provide income for employees after they retire. The plans often involve regular contributions from the employer and the employee. The funds get invested so that they will grow over time.

Severance pay. Compensation for employees whose jobs get terminated, typically due to reasons beyond their control, such as layoffs or company restructuring. It may be based on length of employment.

Sexual harassment. Sexual harassment is illegal. It includes unwelcome sexual advances, requests for sexual favors, or other verbal or physical conduct of a sexual nature that creates a hostile or offensive work environment. Besides sexual harassment based on a hostile work environment, a plaintiff may claim "quid pro quo" sexual harassment. "Quid pro quo" basically means "this for that." It's unwelcome sexual advances by an employer or supervisor that become a condition of the worker's employment or that represent a threat to the employee's continued employment.

Social Security. Social Security is a federal retirement or disability payment program created by taxing employees' income.

Stock options. A type of retirement plan in which employees can buy stock in the company for which they work.

Telecommuting. Working from home or another location that is not the office.

Title VII. The provision of the federal Civil Rights Act of 1964 that prohibits discrimination in employment based on age, color, national origin, race, religion, or sex.

Tuition reimbursement. An employee benefit in which the employer pays all or part of the employee's tuition for coursework or training.

Whistleblower. The term for an employee who reports an employer's illegal activity or misconduct to authorities. Whistleblowers have protections under state and federal law.

Worker's compensation. A form of insurance that provides wage replacement and medical benefits to employees injured on the job. Workers' compensation protects workers and employers by covering medical expenses and lost wages. It protects employers from lawsuits related to workplace injuries.

You Don't Have to Solve This on Your Own: Get a Lawyer's Help

If you have more questions, meeting with an employment lawyer can provide you with the legal advice you need to resolve your employment law inquiries.