Learn More: Employment Law

Glossary of Employment Law Terms

Adverse Employment Action: Any action taken by an employer that negatively affects an employee's job. For example, demoting, firing, disciplining, or failing to promote an employee constitutes an adverse employment action. In most employment discrimination cases, the employee will have to prove that the employer took some sort of adverse employment action in order to win.

Age Discrimination in Employment Act (ADEA): A federal law that protects older employees (those over the age of 40) from employment discrimination on the basis of age. Only employers with more than 20 employees are required to comply with ADEA. However, some states have enacted legislation that protects all employees from age discrimination.

Americans with Disabilities Act (ADA): The ADA is a federal law that protects employees from discrimination on the basis of disability. The ADA also requires employers to make "reasonable accommodations" for certain employees' disabilities.

At-will Employment: An employment relationship in which there is no contractual agreement and either party may terminate the employment relationship at any time, for any reason or for no reason at all, without incurring a penalty. However, at-will employers are still prohibited from firing employees for any reason prohibited by law, such as race, religion, disability, or sex.

Base Period: The fixed period of time used to calculate unemployment compensation benefits.

Bona Fide Occupational Qualification (BFOQ): A job requirement, such as a specified age or sex, or the ability to lift a certain weight, which is potentially illegal because it excludes a protected class of people, can be classified as a BFOQ if the requirement is proven to be in good faith and truly necessary for the employee to perform the job. The successful use of a BFOQ defense is rare.

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

Consolidated Omnibus Budget Reconciliation Act ("COBRA"): A federal law that requires employers to allow employees to continue their health insurance coverage after termination, in the same insurance group, at the group rate and providing the same benefits.

Defamation: A statement made orally or in writing, which damages a person's character. When defamation is oral, it is called slander; when in writing, it is called libel.

Defined benefit plan: A pension plan provided by the employer in which the contribution by the employer varies with market conditions but a specified amount is guaranteed upon retirement.

Defined Contribution Plan: A pension plan provided by the employer in which the contribution by the employer is fixed but the payment at retirement varies with market conditions.

Disability Insurance Coverage: Insurance provided by the employer, which will pay some portion of an employee's salary during periods where the employee is unable, because of an injury or illness, to work. Disability insurance coverage can be long-term or short-term.

Employee Assistance Program (EAP): A workplace program provided by the employer to assist employees with various personal problems, including coping with drug or alcohol abuse, emotional problems, marital difficulties, the balance between work and caring for children or aging parents, job stress or workplace conflict.

Employee Stock Ownership Plan (ESOP): An employer-provided benefit that allows employees to purchase stock in the company under certain favorable terms.

Equal Employment Opportunity Commission (EEOC): An agency of the federal government that may investigate or handle claims of workplace discrimination or harassment. The EEOC may sue an employer directly for violations of federal employment laws, or may instead allow the employee to sue directly, on an individual basis.

Equal Pay Act: A federal law that requires employers to pay the same wages to all employees who do the same work, regardless of gender.

Family Medical Leave Act (FMLA): The federal law that requires most employers to give up to twelve weeks unpaid leave to employees for the birth or adoption of a child, or to take care of the employee's own or family member's serious illness. The FMLA also prohibits retaliation against employees who ask about or take advantage of their FMLA rights.

Fair Labor Standards Act (FLSA): The federal statute that sets the minimum wage and maximum hours of work per day or week in most industries.

Federal Insurance Contributions Act (FICA): The federal statute that imposes Social Security and Medicare tax on employees and employers.

Federal Unemployment Tax Act (FUTA): The federal statute that imposes unemployment tax on employers. Many states have an equivalent statute that employers must comply with as well.

Hostile Work Environment: A hostile work environment has specific requirements to qualify as the basis for a harassment claim. Although most hostile work environment claims involve allegations of sexual harassment, a hostile work environment may be based on other protected characteristics, such as an employee's race or religion. A "hostile work environment" is created where the presence of harassing behavior (in the case of sexual harassment this could include demeaning or sexual photographs, jokes, threats or overall workplace atmosphere) is so "severe and pervasive" that it creates an intimidating and offensive work environment, and actually alters the "terms and conditions" of employment.

Individual Retirement Account (IRA): A tax-deferred savings account in which the employee contributes no more than a set maximum amount annually. Once the employee retires, he or she can receive distributions from the IRA, which will be taxed at that time. There are tax penalties for withdrawing money from an IRA before retirement age.

Implied Contract: A type of enforceable contract that is not made explicitly but is implied from the circumstances or the parties' conduct, or from the terms of an employee handbook.

Medicaid: Joint federal and state public assistance for medical treatment for employees whose income is below a certain amount.

Medicare: Part of the federal Social Security program that pays for medical insurance for elderly and permanently disabled people.

National Labor Relations Act (NLRA): A federal law that regulates the employment relationship between certain employers and employees. Although the NLRA is most commonly associated with unionized employers and employees, and most of its scope is devoted to regulating that relationship, some of its coverage actually extends to all employers and employees.

National Labor Relations Board (NLRB): The federal agency created by the NLRA that serves to prevent and remedy unfair labor practices.

Non-competition Agreement: A contract or part of a contract in which an employee promises not to work for a competing employer or to set up a competing business during, or for a certain length of time after, the employment with the employer.

Occupational Safety and Health Administration (OSHA): The federal agency charged with creating and enforcing workplace health and safety standards.

Overtime Compensation: A higher rate of pay, imposed on a federal level by the FLSA, (usually 1-1/2 or two times the regular hourly rate) that an employer is obligated to pay most employees who work more than a certain number of hours in a day or week. Certain higher-paid salaried employees who make some business decisions for the employer are exempt from the overtime requirement of the FLSA and need not be paid overtime.

Polygraph Test: A lie-detector test.

Profit-sharing Plan: A type of retirement plan in which the amount contributed by the employer is contingent upon the amount of company profits.

Quid Pro Quo: A Latin phrase meaning "something for something." Quid pro quo is a type of sexual harassment in which the harasser asks for a sexual favor in return for providing an employment benefit, such as a raise, continued employment, or other favorable treatment.

Sexual Harassment: Unwelcome sexual advances by an employer or supervisor to an employee that alter the terms and conditions of the employee's employment. Sexual harassment can take the form of either a quid pro quo offer or a hostile work environment. (See quid pro quo and hostile work environment).

Self-insurance: Insurance to cover workplace injuries or illnesses in lieu of workers' compensation insurance provided by a state program of compensation.

Stock Options: A type of compensation in which employees have the opportunity to purchase stock in the company for which they work, often at a below-market rate. There are often restrictions on an employee's exercise of stock options, including time limitations and tax consequences.

Title VII: Part of the federal Civil Rights Act of 1964 that prohibits discrimination in employment on the basis of age, color, national origin, race, religion or sex. Title VII also protects employees who complain about discrimination from being retaliated against by their employer.

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 "blows the whistle" on the employer, i.e., who reports to the authorities an employer's illegal action or practice. Whistleblowers are protected by numerous federal statutes, including the Whistleblower Protection Act (WPA), the Sarbanes-Oxley Act (dealing with corporate fraud), the Occupational Health and Safety Act (OSHA, dealing with workplace safety) and anti-retaliation provisions in numerous statutes governing the workplace.

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