At-Will Employment
An arrangement where either the employer or employee can end employment at any time, for any lawful reason — the default in most U.S. states, with important exceptions.
Reference
HR Glossary for Small Business Owners
HR comes with a lot of acronyms. Here are plain-English definitions of the terms small business owners run into most — no legalese.
Quick reference
Common HR & employment terms
Bookmark this — and when a term turns into a real question for your business, we're here to help.
Exempt vs. Non-Exempt
Whether an employee is exempt from overtime under the FLSA. Misclassifying non-exempt workers as exempt is a common, costly wage-and-hour mistake.
FLSA
The Fair Labor Standards Act — the federal law governing minimum wage, overtime, and related pay rules.
FMLA
The Family and Medical Leave Act — provides eligible employees of covered employers with job-protected unpaid leave for certain family and medical reasons.
ADA
The Americans with Disabilities Act — prohibits disability discrimination and may require reasonable accommodations.
EEOC
The Equal Employment Opportunity Commission — the federal agency that enforces workplace anti-discrimination laws.
I-9
The federal form used to verify an employee's identity and authorization to work in the U.S. Required for every employee.
OSHA
The Occupational Safety and Health Administration — sets and enforces workplace safety standards.
PEO
A Professional Employer Organization — provides HR and benefits through co-employment. See our PEO comparison.
Fractional HR
An experienced HR professional or team working part-time or on demand — the core of outsourced HR.
Worker Classification
Whether a worker is an employee or independent contractor. Getting it wrong carries significant tax and legal risk.
PTO
Paid Time Off — a policy combining vacation, personal, and sometimes sick time into one bank.
COBRA
A federal law letting employees temporarily continue group health coverage after leaving, at their own cost (for covered employers).
Progressive Discipline
A step-by-step approach to addressing performance or conduct issues, creating documentation and a fair chance to improve.
Wrongful Termination
Ending employment in a way that violates the law or an agreement — the risk consistent, documented practices are designed to reduce.
Onboarding
The process of integrating a new hire — paperwork, training, and setup — that strongly influences early retention.
Title VII
The federal law prohibiting employment discrimination based on race, color, religion, sex, or national origin.
ACA
The Affordable Care Act — includes employer health-coverage responsibilities that apply once you reach a certain size.
Workers' Compensation
Insurance covering medical costs and lost wages for work-related injuries, required in most states.
Reasonable Accommodation
An adjustment that lets a qualified employee with a disability perform their job, often required under the ADA.
Severance
Pay or benefits offered when employment ends, often in exchange for a signed agreement releasing claims.
Wage Garnishment
A court- or agency-ordered deduction from an employee's pay that employers are required to administer correctly.
Terms that cost money
Five terms worth understanding properly
Some HR vocabulary is administrative. These are the ones where a loose understanding tends to become expensive.
Exempt does not mean salaried. It means the role meets both a salary threshold and a duties test, and paying a salary alone does not achieve it. Regular rate is the figure overtime is calculated on, and it includes more than base pay — non-discretionary bonuses and shift differentials generally belong in it. Constructive discharge is when conditions are made bad enough that resigning is treated as a dismissal, which is why a resignation is not always the end of a matter.
Protected activity covers raising a complaint, cooperating with an investigation, or requesting an accommodation — and acting adversely towards someone afterwards creates a separate claim regardless of the original merits. Reasonable accommodation is an adjustment enabling someone to do their job, and the obligation is to engage in a genuine interactive process rather than simply to say yes or no.
- Exempt is a test, not a pay method
- Regular rate is broader than base pay
- A resignation can still be a dismissal
- Protected activity creates its own protections
FAQ
HR glossary questions
The highest-stakes ones tend to be exempt vs. non-exempt classification, worker classification (employee vs. contractor), at-will employment, and the major federal laws — FLSA, FMLA, and ADA. Getting these wrong is where small businesses most often run into trouble.
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