HR Glossary
Plain-English definitions for every HR, payroll, compliance, and benefits term your team needs to know.
133 terms · A–Z · Updated 2026
A
ACA (Affordable Care Act)
Federal law (2010) requiring employers with 50+ full-time equivalent employees (ALEs) to offer minimum essential coverage or face penalties. Also expanded Medicaid and created the insurance marketplace.
ADA (Americans with Disabilities Act)
Federal law prohibiting discrimination against qualified individuals with disabilities in all aspects of employment, and requiring employers to provide reasonable accommodations.
ADA Accommodation
A modification to a job, work environment, or the way work is performed that enables a qualified individual with a disability to perform the essential functions of the role. Employers must provide accommodations unless it causes undue hardship.
ADEA (Age Discrimination in Employment Act)
Federal law protecting employees and job applicants aged 40 and older from discrimination based on age in hiring, firing, pay, job assignments, promotions, and training.
Adverse Action
Under the FCRA, the formal process an employer must follow when taking a negative employment action (not hiring, terminating, demoting) based in whole or in part on a consumer report (background check), including providing the candidate a pre-adverse action notice, a copy of the report, and a summary of rights.
aPHR (Associate Professional in Human Resources)
The aPHR is HRCI’s entry-level certification for HR professionals just beginning their careers. It validates foundational HR knowledge and does not require prior experience.
ATS (Applicant Tracking System)
Software that automates the collection, sorting, and management of job applications — used by HR teams to streamline recruiting pipelines from posting to offer.
At-Will Employment
The default employment doctrine in 49 U.S. states (except Montana) allowing either party to end the employment relationship at any time, for any legal reason, without advance notice or cause. Exceptions include protected class discrimination and implied contract claims.
B
Background Check
A pre-employment screening process verifying an applicant’s criminal history, employment record, education, references, and other credentials before making a hiring decision.
Ban the Box
A hiring reform movement and law (enacted in 20+ states and 150+ cities) that prohibits employers from asking about criminal history on job applications, delaying the inquiry until later in the hiring process.
Base Salary
The fixed annual or hourly compensation paid to an employee, not including bonuses, commissions, overtime, or benefits. The foundation of total compensation.
Benefits Administration
The management of employee benefit programs including health insurance, retirement plans, FSAs, HSAs, COBRA, and supplemental coverages — including enrollment, eligibility, and carrier coordination.
Bonus
Additional compensation paid to employees beyond base salary, typically tied to individual, team, or company performance goals. Can be discretionary or contractually guaranteed.
BYOD (Bring Your Own Device)
A workplace policy allowing employees to use personal devices — phones, laptops, tablets — for work purposes, raising questions around data security and reimbursement.
C
Career Banding
A compensation structure that groups similar job roles into broad pay ranges, allowing for flexibility in pay progression without requiring a formal promotion.
COBRA (Consolidated Omnibus Budget Reconciliation Act)
Federal law requiring employers with 20+ employees to offer continuation of group health coverage to employees and dependents who lose coverage due to qualifying events (termination, reduced hours, divorce, etc.) for up to 18–36 months.
Collective Bargaining
The negotiation process between an employer and a union representing employees to establish wages, hours, benefits, and working conditions in a collective bargaining agreement (CBA).
Compensatory Time (Comp Time)
Time off granted to employees in lieu of overtime pay. Legal for public-sector employers under certain conditions; generally not permitted for private-sector non-exempt employees under FLSA.
Compliance
Adherence to federal, state, and local employment laws, regulations, and internal policies governing the employer-employee relationship — including wage laws, anti-discrimination statutes, and safety standards.
Constructive Dismissal
When an employer makes working conditions so intolerable that a reasonable employee feels compelled to resign. Courts may treat constructive dismissal as an involuntary termination, exposing employers to wrongful termination claims.
Contingent Worker
A worker engaged on a non-permanent basis — including freelancers, contractors, temp agency workers, and gig workers — who is not classified as a full-time employee.
Cost-Per-Hire
A recruiting metric calculated by dividing total hiring costs (advertising, recruiter fees, onboarding, etc.) by the number of hires made in a given period.
D
Debarment
A federal or state government action that disqualifies an individual or company from participating in government contracts, often due to fraud, misconduct, or regulatory violations.
DEI (Diversity, Equity & Inclusion)
A framework of organizational practices and policies designed to create a workplace that values diverse perspectives, ensures equitable opportunities, and fosters a sense of belonging for all employees.
DEIA (Diversity, Equity, Inclusion & Accessibility)
An organizational framework focused on creating workplaces that are representative, fair, welcoming, and accessible to all individuals regardless of background or identity.
Dependent Care FSA
A pre-tax benefit account that allows employees to set aside up to $5,000 per year (per household) for eligible dependent care expenses such as daycare, after-school care, or elder care.
Direct Deposit
Electronic transfer of an employee’s net pay directly into their bank account on payday — the standard payroll disbursement method that eliminates paper checks.
Documentation
The practice of recording employment-related events — performance issues, disciplinary actions, accommodations, investigations — in writing to protect both employer and employee interests.
E
E-Verify
A web-based system operated by DHS and SSA that allows employers to electronically verify the employment eligibility of newly hired employees against federal databases. Mandatory for federal contractors and in some states.
EAP (Employee Assistance Program)
A confidential, employer-sponsored benefit providing employees and their families short-term counseling, referrals, and resources for mental health, financial, legal, and personal issues.
EEO-1 Report
An annual federal compliance report submitted to the EEOC categorizing a company’s workforce by race/ethnicity, gender, and job category. Required for employers with 100+ employees.
EEOC (Equal Employment Opportunity Commission)
The federal agency responsible for enforcing federal anti-discrimination laws in the workplace, including Title VII, the ADA, ADEA, and Equal Pay Act.
Employee Engagement
The degree to which employees are emotionally committed to their organization’s goals, feel valued, and are motivated to contribute beyond minimum expectations.
Employee Handbook
A formal document outlining an employer’s policies, procedures, expectations, and legal obligations — covering topics like PTO, conduct standards, harassment, and benefits.
Employee Relations
The HR function focused on managing the employer–employee relationship through conflict resolution, investigations, performance management, and creating a positive work environment.
Employer of Record (EOR)
A third-party organization that legally employs workers on behalf of a client company, handling payroll, taxes, benefits, and compliance — particularly useful for hiring in new states or countries.
ERISA (Employee Retirement Income Security Act)
Federal law that sets minimum standards for retirement and health benefit plans in private industry, including fiduciary responsibilities, reporting requirements, and participant rights.
Exempt Employee
An employee who is not entitled to overtime pay under the FLSA because they meet specific salary threshold and job duty tests (executive, administrative, professional, or other exemptions).
Exempt vs. Non-Exempt
A classification under the FLSA determining overtime eligibility. Exempt employees meet salary ($684/week minimum) and duties tests and are not entitled to overtime. Non-exempt employees must be paid 1.5× for hours over 40/week.
Exit Interview
A structured conversation with a departing employee to gather candid feedback about their experience, reasons for leaving, and suggestions for improvement — valuable for retention strategy.
F
FACIS (Fraud and Abuse Control Information System)
A healthcare-specific screening database used to identify individuals and entities sanctioned, excluded, or debarred from federal and state healthcare programs.
FCRA (Fair Credit Reporting Act)
Federal law governing how employers use consumer reports (background checks and credit reports) for employment purposes, including requirements for written disclosure, written authorization, and adverse action procedures.
FLSA (Fair Labor Standards Act)
The federal law establishing minimum wage ($7.25/hr federally), overtime pay (1.5x for hours over 40/week), recordkeeping, and youth employment standards for covered workers.
FMLA (Family and Medical Leave Act)
Federal law entitling eligible employees at covered employers to 12 weeks of unpaid, job-protected leave per year for qualifying family and medical reasons, with continuation of group health benefits.
Form I-9
The U.S. Citizenship and Immigration Services form required for every new hire verifying identity and authorization to work in the United States. Must be completed within 3 business days of start date.
Fractional HR
Part-time or project-based access to a senior HR professional who works embedded within an organization to handle strategic HR needs without the cost of a full-time hire.
FSA (Flexible Spending Account)
An employer-sponsored benefit allowing employees to set aside pre-tax dollars for eligible healthcare or dependent care expenses. Unlike HSAs, FSA funds generally must be used within the plan year.
Full-Cycle Recruiting
An end-to-end recruiting process managed by one recruiter or team — from identifying the need and posting the role through offer acceptance and onboarding.
G
General Ledger (GL) Integration
The synchronization of payroll data with an organization’s accounting system to automatically post labor costs, taxes, and deductions to the correct chart of accounts.
GPHR (Global Professional in Human Resources)
The GPHR credential from HRCI is designed for HR professionals who develop and implement HR policies and practices in global organizations. Covers international HR, global mobility, and cross-cultural management.
Grievance
A formal complaint filed by an employee or union alleging a violation of a workplace policy, employment contract, or collective bargaining agreement. Grievance procedures are outlined in employee handbooks or CBAs.
Gross Pay
An employee’s total earnings before any deductions — including taxes, benefits contributions, garnishments, or retirement withholding — are subtracted.
H
HDHP (High-Deductible Health Plan)
A health insurance plan with lower premiums and higher deductibles that qualifies account holders to contribute to a Health Savings Account (HSA). The IRS sets annual minimum deductible and out-of-pocket maximum limits.
HIPAA (Health Insurance Portability and Accountability Act)
Federal law protecting the privacy and security of individuals’ health information. In HR, it governs how employers handle medical records and limits what health information employers can request.
HRA (Health Reimbursement Arrangement)
An employer-funded benefit account that reimburses employees for qualified medical expenses and individual insurance premiums. Unlike HSAs, HRAs are funded solely by the employer.
HR Audit
A systematic review of an organization’s HR policies, practices, documentation, and compliance posture to identify risks, gaps, and opportunities for improvement.
HRBP (HR Business Partner)
A senior HR professional who works closely with business leaders to align HR strategy, talent planning, and people practices with organizational goals.
HRCI (HR Certification Institute)
HRCI is the premier credentialing organization for the HR profession. It offers eight HR certifications including PHR, SPHR, and GPHR, recognized globally as the standard for HR excellence.
HRO (HR Outsourcing)
Contracting with an external provider to manage some or all HR functions — including payroll, benefits, compliance, recruiting, and training — on behalf of the organization.
HRIS (Human Resources Information System)
A software platform that centralizes employee data, HR workflows, payroll, benefits, time tracking, and reporting — serving as the system of record for the workforce.
HSA (Health Savings Account)
A tax-advantaged savings account paired with a high-deductible health plan (HDHP) that allows employees to save pre-tax dollars for qualified medical expenses. Funds roll over year to year and are portable.
I
I-9 (Employment Eligibility Verification)
A federal form (USCIS Form I-9) required for every employee hired in the U.S. to verify identity and employment authorization. Employers must retain I-9s for 3 years from hire date or 1 year after termination, whichever is later.
ICHRA (Individual Coverage HRA)
A type of HRA that allows employers of any size to reimburse employees for individual health insurance premiums and medical expenses on a tax-free basis. Replaced AHPs as a flexible alternative to group health coverage.
Incentive Pay
Compensation tied to performance targets — including bonuses, commissions, profit sharing, or stock options — designed to motivate employees toward specific business outcomes.
Independent Contractor
A self-employed individual engaged by a company to perform specific work under a contract, not classified as an employee. Classification depends on behavioral control, financial control, and relationship type.
J
Job Classification
The process of organizing jobs into groups based on duties, responsibilities, skill requirements, and pay — used to establish pay grades, exemption status, and career ladders.
Job Description
A formal document outlining the duties, responsibilities, required qualifications, reporting structure, and working conditions of a position — foundational to recruiting, compensation, and performance management.
K
KPI (Key Performance Indicator)
A quantifiable measure used to evaluate the performance of an individual, team, or organization against defined objectives — common HR KPIs include turnover rate, time-to-fill, and engagement scores.
L
Labor Law Compliance
Adherence to the body of federal, state, and local laws governing the employment relationship — including wage and hour, anti-discrimination, leave, safety, and union rules.
Layoff
An employer-initiated separation from employment due to economic conditions, restructuring, or position elimination — not related to employee performance. May trigger WARN Act notice obligations for large employers.
Leave of Absence
An approved period away from work, which may be paid or unpaid, and may be protected by law (FMLA, ADA, USERRA) or granted at employer discretion for personal, medical, or family reasons.
LMS (Learning Management System)
A software platform used to create, deliver, track, and manage employee training programs — from compliance training to professional development courses.
M
MEAP (Multiple Employer Adoption Plan)
A 401(k) retirement plan structure that allows multiple unrelated employers to participate in a single plan, reducing administrative burden and cost while still offering competitive retirement benefits.
Mental Health Parity
Federal law (MHPAEA) requiring employer-sponsored health plans to provide coverage for mental health and substance use disorders that is comparable to coverage for medical and surgical services.
Merit Pay
A pay increase awarded based on an employee’s individual performance evaluation — tied to a merit matrix that aligns salary increases with performance ratings and position in pay range.
Minimum Wage
The lowest hourly rate an employer is legally permitted to pay employees, set federally at $7.25/hour but often higher under state or local law. Non-exempt employees must receive the highest applicable rate.
MVR (Motor Vehicle Record)
A driving history report used in background screening for positions that require driving — showing license status, violations, DUIs, and accident history.
N
Net Pay
An employee’s take-home pay after all deductions — including federal and state taxes, Social Security, Medicare, benefits contributions, and garnishments — are subtracted from gross pay.
Non-Compete Agreement
A contract clause restricting an employee from working for competitors or starting a competing business for a defined period and geography after leaving the company. Enforceability varies significantly by state.
Non-Disclosure Agreement (NDA)
A legally binding contract requiring parties to keep specified information confidential. Commonly used to protect trade secrets, proprietary data, and business strategies.
Non-Exempt Employee
An employee covered by FLSA overtime provisions — entitled to time-and-a-half pay for all hours worked over 40 in a workweek, regardless of salary status.
O
Onboarding
The structured process of integrating a new hire into the organization — covering paperwork completion, orientation, system access, training, and cultural immersion — typically spanning the first 30–90 days.
Open Enrollment
The annual period during which employees can enroll in, change, or waive employer-sponsored benefit plans (health, dental, vision, FSA, etc.). Changes outside of open enrollment typically require a qualifying life event.
OSHA (Occupational Safety and Health Administration)
The federal agency that sets and enforces workplace safety and health standards, conducts inspections, investigates incidents, and requires employers to maintain OSHA 300 injury/illness logs.
Outplacement
Career transition services provided by an employer to departing employees — including resume assistance, interview coaching, job search support, and counseling — typically offered during layoffs or restructuring.
Overtime
Under the FLSA, non-exempt employees must be paid at least 1.5 times their regular rate for all hours worked over 40 in a workweek. Some states have daily overtime rules that may be more generous.
P
Pay Equity
The principle that employees performing substantially similar work should be compensated equally regardless of gender, race, ethnicity, or other protected characteristics. Several states have enacted pay equity and pay transparency laws.
Pay Stub
A document provided to employees each pay period showing gross pay, all deductions itemized, net pay, and year-to-date totals — required by most states.
Payroll Audit
A systematic review of payroll records, processes, and controls to verify accuracy, identify discrepancies, and ensure compliance with tax and wage laws.
PEO (Professional Employer Organization)
A firm that enters into a co-employment relationship with a client company, becoming the employer of record for tax and benefit purposes while the client retains day-to-day operational control of workers.
Performance Improvement Plan (PIP)
A formal document outlining specific performance deficiencies, measurable improvement goals, a timeline for improvement, and consequences if targets are not met. Used as a structured path before termination.
PHR (Professional in Human Resources)
The PHR credential from HRCI validates mastery of the technical and operational aspects of HR management, including U.S. laws and regulations. Ideal for HR professionals who focus on program implementation.
Progressive Discipline
A structured HR approach to employee misconduct that escalates consequences through a series of steps — typically verbal warning, written warning, final warning, suspension, and termination — to give employees an opportunity to correct behavior.
PTO (Paid Time Off)
An employer policy that combines vacation, sick leave, and personal days into a single bank of accrued time employees can use for any reason. States like California treat accrued PTO as earned wages.
Q
Qualified Benefit Plan
An employer-sponsored benefit plan that meets IRS requirements to receive favorable tax treatment — including 401(k) plans, health plans, FSAs, and HSAs.
Qualifying Life Event (QLE)
A change in personal circumstances — such as marriage, divorce, birth/adoption of a child, or loss of other coverage — that allows employees to modify their benefits elections outside of open enrollment.
Quit (Voluntary Termination)
An employee-initiated separation from employment. Voluntary quits may affect unemployment insurance eligibility and trigger final pay requirements under state wage payment laws.
R
Reasonable Accommodation
A modification or adjustment to a job, work environment, or work process that enables a qualified individual with a disability (or sincerely held religious belief) to perform essential job functions, required under the ADA and Title VII.
Retention Rate
The percentage of employees who remain with an organization over a given period. Calculated as: ((Employees at end of period − New hires during period) ÷ Employees at start of period) × 100.
Retaliation
Adverse action taken against an employee for engaging in protected activity — such as filing a discrimination complaint, participating in an investigation, or taking FMLA leave. Prohibited under Title VII, ADA, FMLA, FLSA, and most state laws.
Right to Work
State laws (enacted in 27 states) that prohibit requiring union membership or paying union dues as a condition of employment. Distinct from at-will employment.
RPO (Recruitment Process Outsourcing)
An arrangement where an employer transfers all or part of its recruitment function to an external provider, who manages some or all stages of the hiring process on the employer’s behalf.
S
Salary Band
A defined pay range for a job grade or family, with a minimum, midpoint, and maximum — used to guide compensation decisions, manage internal equity, and maintain market competitiveness.
Severance
Compensation and/or benefits provided to employees upon involuntary termination. Not required by federal law but may be required by contract, policy, or state law. Often exchanged for a release of legal claims.
SHRM (Society for Human Resource Management)
SHRM is the world’s largest HR professional association, serving 325,000+ members in 165 countries. SHRM provides resources, certification (SHRM-CP/SCP), advocacy, and research for the HR profession.
SHRM-CP (SHRM Certified Professional)
A competency-based HR certification from the Society for Human Resource Management for professionals who implement HR policies and strategies. Covers behavioral competencies and HR knowledge domains.
SHRM-SCP (SHRM Senior Certified Professional)
SHRM’s senior-level certification for HR professionals who develop HR strategies, lead the HR function, and influence organizational objectives.
Skills Gap
The difference between the skills an organization needs to meet its objectives and the skills its current workforce possesses — driving hiring, training, and workforce planning decisions.
SPHR (Senior Professional in Human Resources)
HRCI’s senior-level credential for HR professionals who design and plan (rather than implement) HR strategy and policy. Requires significant experience and focuses on the business and strategic side of HR.
Strategic HR Assessment
A comprehensive evaluation of an organization’s HR function, policies, practices, and workforce data to identify strengths, gaps, risks, and strategic opportunities.
T
Talent Acquisition
The strategic, long-term approach to identifying, attracting, and hiring skilled candidates — distinct from reactive recruiting in that it focuses on building pipelines for future organizational needs.
Tax Withholding
The amount an employer deducts from each paycheck for federal, state, and local income taxes, Social Security (6.2%), and Medicare (1.45%) — based on the employee’s W-4 elections.
Termination
The end of the employment relationship, which may be voluntary (resignation, retirement) or involuntary (layoff, discharge for cause). Proper documentation and final pay compliance are critical.
Time and Attendance
Systems and processes for tracking when employees work — including clock-in/out, scheduling, leave requests, and overtime — integrated with payroll for accurate compensation.
Title VII (Civil Rights Act of 1964)
Landmark federal law prohibiting employment discrimination based on race, color, religion, sex, or national origin. Applies to employers with 15+ employees and covers hiring, firing, pay, and working conditions.
Total Rewards
A strategic framework encompassing all monetary and non-monetary compensation an employer provides — including base pay, incentives, benefits, career development, and work-life programs — to attract and retain talent.
Turnover Rate
The percentage of employees who leave an organization (voluntarily or involuntarily) during a given period. High turnover indicates engagement, compensation, or cultural issues and carries significant cost.
U
Unemployment Insurance (UI)
A joint federal-state program providing temporary income replacement to eligible workers who lose their jobs through no fault of their own. Employers fund UI through state and federal payroll taxes (SUTA/FUTA).
USERRA (Uniformed Services Employment and Reemployment Rights Act)
Federal law protecting the employment and benefits rights of employees who leave to perform military service — guaranteeing reemployment rights, seniority, and benefit continuation upon return.
V
Variable Pay
Compensation that fluctuates based on performance or business results — including bonuses, commissions, profit sharing, and gainsharing. Supplements base salary as part of total rewards.
Vesting
The process by which an employee earns non-forfeitable rights to employer contributions to a retirement plan or equity awards over time — either cliff vesting (all at once) or graded vesting (gradually).
Vesting Schedule
The timeline over which employees earn full ownership of employer-contributed benefits such as 401(k) matches or stock options. Common types include cliff vesting (100% at one date) and graded vesting (gradual over 3–6 years).
Voluntary Turnover
The rate at which employees choose to leave an organization on their own accord. High voluntary turnover signals issues with compensation, culture, management, or career development.
W
W-2 Form
The IRS form employers must provide to each employee by January 31 each year, reporting annual wages paid and taxes withheld — used by employees to file their personal income tax returns.
W-4 Form
The IRS form employees complete when hired (and update as needed) to indicate their federal income tax withholding elections — including filing status, dependents, and additional withholding amounts.
Wage Garnishment
A court or government order requiring an employer to withhold a portion of an employee’s wages to satisfy a debt — including child support, student loans, or tax levies.
Whistleblower
An employee who reports illegal, unethical, or unsafe workplace activity to internal management or an external authority. Federal and state laws protect whistleblowers from retaliation.
Workers’ Compensation
A state-mandated insurance program providing wage replacement and medical benefits to employees injured or who become ill in the course of employment. Employers pay premiums; employees typically waive the right to sue.
Workplace Investigation
A formal, documented inquiry into a workplace complaint — including harassment, discrimination, or misconduct allegations — conducted to gather facts, assess credibility, and determine appropriate action.
Wrongful Termination
A dismissal that violates federal or state law, an employment contract, or public policy — such as firing an employee for exercising a legal right, whistleblowing, or based on a protected characteristic.
Y
Year-End Payroll Processing
The set of year-end activities employers must complete — including reconciling payroll records, issuing W-2s, filing employer tax returns (940, 941), and resetting employee deductions for the new year.
Z
Zero-Tolerance Policy
An employer policy mandating predetermined, non-discretionary consequences for certain serious workplace violations — such as workplace violence, harassment, or drug use — regardless of circumstances or intent.
401(k)
A tax-advantaged employer-sponsored retirement savings plan allowing employees to contribute pre-tax (traditional) or post-tax (Roth) income, often with an employer match. Governed by ERISA and administered by plan sponsors.
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