US Employment Law Glossary


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Wednesday, August 16, 2017

Understanding the many terms and phrases associated with employment law in the US can be a considerable step towards making well-informed decisions for your business.

Article 5 Minutes
US Employment Law Glossary

Employment law can be a complicated business, and is likely to end up being extremely expensive for you and your company if you don't adhere to it. This simple glossary should help you better understand some of the most commonly-used terms in order to make well-informed decisions.


401(k) Plans are defined contribution pension plans that are primarily funded by employees, before tax, directly from their salary. They allow workers to save a portion of their wage and delay paying taxes until they get the overall payout.


This refers to how easily something can be accessed by a person with a disability. It can include the work premises but also online portals, resources and training.

Affirmative Action

This is anything carried out by an organization that is designed to increase employment opportunities of certain groups. Under the Americans with Disabilities Act, employers do not have to take affirmative action for persons with disabilities but must ensure steps are taken so it is nondiscriminatory. However Section 503 of the Rehabilitation Act does require affirmative action be taken in employment of persons with disabilities by Federal contractors.

Age Discrimination in Employment Act (ADEA)

A federal law that prevents employers from discriminating employees on the basis of age.

Alternative Dispute Resolution (ADR)

Relying on referral to an independent party, an ADR is the settling of a dispute without going to court.

Americans with Disabilities Act (ADA)

This is a civil rights law that makes it illegal for any organization to discriminate against a qualified individual with a disability. It also covers any discrimination in state and local government services, employment, public accommodations, transportation, and telecommunication. The ADA applies to any company with at least 25 employees


This is a form of ADR, where an impartial third party resolves the dispute. It can take many forms and the decision is normally final, though "advisory arbitration" allows both parties to review it.

At-will employment

Terms of employment where there is no contract, allowing either party to terminate it for no reason without incurring any penalty.

Auxiliary Aids and Services

Resources that help an individual with a communication-related disability, such as qualified interpreters, taped texts or braille.

Back pay

A compensation of earnings that would have been given if the employee hadn't been illegally fired or denied a promotion, usually as the result of an employment lawsuit.

Cafeteria plan

A term that allows employees to choose what employment benefits they like from a "menu" up to a specified financial amount.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

This is a federal law that allows employees to continue their health insurance coverage - under the same terms - after their employment ends.

Comparable worth

A legal concept that insists that employees that work similar jobs and are of a similar value to the company must be paid the same, regardless of gender. This comes under the 1963 Equal Pay Act.

Constructive discharge

This is where an employee terminates the employment contract because they were faced with intolerable working conditions. Employers are liable in this scenario if the individual can prove that behavior, environment or another factor made them leave their role.

Employee Assistance Program (EAP)

Support that is provided by an organization to help employees deal with drug or alcohol abuse, emotional problems, job stress, marital discord, or workplace conflict.

Equal Employment Opportunity Commission (EEOC)

The federal agency that enforces laws made to prevent discrimination of employees in the workplace.

Family Medical Leave Act (FMLA)

A federal law that requires employers that meet a certain criteria to allow employees time off to take care of their own or a family member's illness. This can also apply to those starting a new family, including adopted children.

Front pay

A type of compensation where employees should be paid the amount they would have earned if they were reinstated after unfair dismissal or hired into a higher-paying position that they were illegally denied.

Garnishment of wages

A term that allows employers to take a sum directly from an employee's wages for child support or something similar.

Hostile working environment

Where conditions in the workplace have prevented an employee doing their job properly because of harassment or other unwanted behavior.

Individual Retirement Account (IRA)

A savings account where employees can contribute a certain amount each year without having to pay tax until the final amount is delivered.

Implied contract

A type of contract that can be enforced but is not explicitly made, rather is implied through circumstances or conduct.

Minimum wage

The minimum amount employees must be paid in certain industries as set by federal or state law.

National origin discrimination

A term referring to employers that discriminate against employees because of their ethnicity.

Noncompetition agreement

A contractual agreement where an employee cannot work for a competing employer or set up a competing business during - or for a certain length of time after - employment with an organization.

Occupational disease

Where an employee contracts an illness that can be attributed to the conditions of a workplace.

Occupational Safety & Health Administration (OSHA)

The federal agency in charge of creating and enforcing standards surrounding workplace health and safety.

Overtime compensation

The higher rate of pay given to employees who work outside a specified set number of hours.

Sexual harassment

A term for unwelcome sexual advances by an employer or manager that puts the employee in a position where they are concerned about their employment and their continued employment. This may turn into a hostile work environment claim if there is no physical harassment but an employee is the subject of demeaning or sexual photographs, jokes, or threats.

Social Security

A program that enables the individual - or their family - to access retirement or disability payments if the employee qualifies.

Title VII

A segment of the Civil Rights Act of 1964 federal law that prevents employers discriminating against individuals because of their age, color, ethnicity, religion or gender.

Tuition reimbursement

Employers either subsidize or pay for in full an employee's education as part of a benefits package.

Click here for our British Employment Law Jargon Buster.

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