A
Allyship training is a nuanced and focused form of DEI training that teaches employees about marginalized groups and the biases, stereotypes, and inequalities they face. It provides resources and foundational knowledge workplace allies need to communicate with and advocate for underrepresented members of the workforce.
As seen in: Allyship Training for Organizations
Attrition refers to gradual reduction in an employee’s workforce over time. Attrition occurs for voluntary reasons (resignation, retirement, relocation, etc.) and involuntary reasons (discharges, layoffs, and eliminated positions, etc.).
As seen in: Employee Attrition Rate Calculation: A Quick Guide
An applicant tracking system (ATS) is a software application that allows hiring teams to organize candidate information and monitor the hiring pipeline for multiple open roles. ATS software streamlines most recruitment operations, including creating job posts, screening candidates, and scheduling interviews.
As seen in: Applicant Tracking System (ATS) Software Guide
B
Benefits administration refers to the process of managing the benefits package a company offers its employees. Common benefits include health insurance, retirement plans, life insurance, disability coverage, pet insurance, and wellness programs. Benefits administration involves tasks like researching benefits options, negotiating competitive rates, educating employees during open enrollment, assisting employees with enrollment after qualifying life events, preventing compliance violations, and analyzing benefits utilization data.
As seen in:
A boomerang employee is one who previously worked for a company and has been rehired in the same role or a different one. Boomerang employees may have left voluntarily or they have been laid off in a downsizing measure.
As seen in: How Boomerang Employees Can Reinvigorate Your Organization
C
Candidate relationship management (CRM) is the practice of nurturing relationships with current and prospective job candidates throughout the recruiting process. It involves strategic engagement with passive candidates who have already been vetted.
As seen in: Top Candidate Relationship Management Software
Company culture describes the overall work environment of your company. It represents both stated and implied external and internal company procedures, processes, policies, behaviors, and interactions.
As seen in: Culture vs. Values: What’s the Difference?
Company values are principles, ethics, morals, and beliefs that guide an employer’s decision-making process. Examples include concepts like teamwork, inclusion, innovation, and trust.
As seen in: Culture vs. Values: What’s the Difference?
Contractors are the second-most common type of worker in the U.S. after employees. Contractors can refer to contingent workers or subcontractors, but for payroll purposes, the term contractors is typically shorthand for contingent workers.
Contingent workers comprise independent contractors, freelancers, gig workers, and consultants who work independently of the employer, typically providing project-based services. While employers hire these workers directly, contingent workers are not economically dependent on them. This also means employers are not responsible for contractors’ benefits and tax withholdings.
This makes paying contractors significantly easier than paying employees since you only have to pay them their agreed-upon compensation without factoring in deductions, taxes, and other benefits. However, there are hefty fines for misclassifying employees as contractors.
In January 2024, the Department of Labor Wage and Hour Division (WHD) released new rules on employee and contractor classification. It is now much harder to classify workers as contractors, so carefully examine your workers’ responsibilities and level of independence before giving them their first paycheck.
As seen in: Top Contractor Payroll Solutions
D
DEI stands for diversity, equity, and inclusion. It’s also commonly referred to as DEIB (DEI + belonging), DEIA (DEI + accessibility), or DEIJ (DEI + justice).
As seen in: What is DEI?
Deductions are any amount withheld from an employee’s paycheck, like health insurance premiums, payments for company equipment, child support, and taxes.
Outside of deductions mandated by law, you generally need to obtain authorization from the employee before withholding any amount from their pay. Even then, those voluntary deductions should not take the employee’s paycheck below what they would make at minimum wage.
Direct deposit is a method of paying employees by sending their paychecks straight to their bank accounts. Unlike paper checks, direct deposit gives employees quicker access to their funds since they do not have to deposit checks into their banking accounts or exchange them for cash.
You must receive a direct deposit authorization form from employees that outlines their bank account and routing numbers, plus permission to send them their funds electronically.
As seen in: What Are the Best Methods for Paying Employees?
Disposable earnings refer to the employee’s gross pay after all legally required deductions, including federal, state, and local income taxes, plus the employee’s portion of FICA. For example, if John Doe’s gross pay is $1,500 and his total tax deductions for FIT, state income, and FICA are $356, then his disposable income is $1,144.
Most garnishment orders use disposable earnings to calculate how much the employee owes per paycheck. Be sure to carefully read how the garnishment order defines disposable earnings or how your employee’s state defines it. Some definitions include health insurance and retirement contributions in the disposable earnings calculation, while others do not.
Diversity hiring is a recruitment strategy that aims to increase the diversity of a company’s workforce by eliminating bias, accessibility barriers, and non-inclusive recruiting tactics in the talent acquisition process.
As seen in: The Complete Guide to Diversity Hiring
E
Employees are workers who depend on employers for work. Employers are responsible for providing employees with compensation and other federal, state, or local mandated benefits. You can further divide employees into exempt or non-exempt from overtime pay based on factors like salary level, executive power, and whether they work in a creative or learned profession.
For payroll purposes, you must pay your employees per applicable labor laws, including withholding and remitting various payroll taxes to government agencies on their behalf. Because of this, employee payroll can be tricky, resulting in common mistakes such as misclassification to avoid tangling with various pay and tax laws.
Employee resource groups (ERGs) are employee-led internal organizations that focus on creating more diverse, inclusive workplaces. They also go by affinity groups, business resource groups, or business network groups.
As seen in: Employee Resource Groups: Definition & Implementation
EOR stands for employer of record. An employer of record (EOR) serves as the legal employer of a business’s workforce.
As seen in:
Expense management is the practice of forecasting, paying, tracking, reporting, and reimbursing business expenses.
As seen in: What is Expense Management?
F
The Fair Labor Standards Act (FLSA) is the U.S. federal law governing worker pay, minimum wage, overtime, recordkeeping, and youth employment for private and public employers. Most states and some municipalities also have their own version of the FLSA with more stringent regulations and employee protections.
The Federal Insurance Contribution Act (FICA) is the federal law that mandates Social Security and Medicare payroll taxes. Many HR professionals and payroll providers use FICA to refer to both tax payments collectively. While the total paid in FICA taxes is 15.3% that you and your employee share, the law allocates 12.4% of that amount to Social Security and 2.9% to Medicare.
The Federal Unemployment Tax Act (FUTA) regulates employer tax payments for the federal unemployment compensation program. The rate is 6% of employees’ taxable wages, and you are responsible for the payment. However, you pay FUTA only on the first $7,000 of employees’ taxable annual income.
If your employees live in a state with a state unemployment insurance program that you pay into, you can receive up to a maximum credit of 5.4%, reducing your FUTA rate to 0.6%.
The 1099 forms summarize various types of income you may receive in a calendar year outside of the employer-employee relationship. Many types of 1099 forms exist, but employers frequently use 1099 to refer to Form 1099-NEC. 1099-NECs notify contractors of the income they received from their clients in a calendar year to complete their tax returns.
Like W-2s, you must send 1099-NECs to your contractors by January 31. You also file 1099-NECs with the IRS by this date.
G
Garnishments are court-ordered withholdings from employee paychecks to pay for a debt. Child support is the most common garnishment, but employees may also receive garnishments for unpaid taxes or loan defaults. The employer is responsible for withholding the proper garnishment amount from an employee’s paychecks and paying the appropriate agency on their behalf.
Gross pay is the total earnings of an employee’s paycheck before taxes and deductions. For example, let’s say an employee’s straight-time rate is $20 per hour. If they work 40 hours in a pay period without any overtime, commissions, tips, and other earnings, their gross pay before taxes and deductions is $800.
H
Holiday pay is paid leave provided to employees for public holidays recognized by the company. In the U.S., this typically means paying employees at their straight-time rate for their normally scheduled hours on the following days under the employer’s holiday time off policy:
- New Year’s Day.
- Memorial Day.
- Juneteenth.
- Independence Day.
- Labor Day.
- Thanksgiving.
- Christmas.
As seen in: How to Navigate Employee Holiday Time Off
HRIS stands for human resources information system.
As seen in:
HRMS stands for human resources management system.
As seen in:
An HR consultant is an HR expert that a company hires as an independent contractor to accomplish a specific project or objective. HR consultants provide various services, including professional consulting, education, training, and advising on human resource solutions.
As seen in: What Does an HR Consultant Do?
I
Income taxes are the federal and applicable state and local taxes withheld from an employee’s paycheck based on their taxable income. Generally, the more an employee makes, the more you withhold in taxes.
As an employer, you are responsible for calculating, withholding, and remitting income taxes from an employee’s paycheck to the appropriate government agencies.
The I-9 form is a document that verifies a new employee’s identity and authorization to work in the U.S. The form is issued by the United States Citizenship and Immigration Services (USCIS) and is enforced by Immigration and Customs Enforcement (ICE). You are legally required to complete an I-9 form for every new employee.
As seen in: How to Fill Out I-9 Form
J
A job hopper is someone who has started and ended multiple jobs in quick succession within a relatively short timeframe.
As seen in: How to Hire & Retain Job Hoppers
M
Medicare tax is the amount you and your employee pay to fund the U.S. Medicare program. Like Social Security tax, employees pay a flat rate of 1.45% of their taxable wages, which you match every paycheck.
Minimum wage is the lowest per-hour rate employers can pay employees for their work. The current U.S. federal minimum wage is $7.25 per hour, but most states and several local areas have higher minimum wage requirements. You must follow the minimum wage law that provides the highest rate for employees in your area or state.
N
You can think of net pay as an employee’s take-home pay. It is the amount of money employees receive following all taxes and deductions. For example, if an employee’s gross pay is $800 but they have $100 in taxes and deductions, then their net pay is $700.
O
Federally, overtime rate is the pay rate hourly non-exempt workers receive for any hours worked over 40 in a week, but this can be different state by state. Overtime rate is one-and-a-half times an employee’s straight-time rate.
Example: If an employee’s straight-time rate is $20 per hour, their overtime rate is:
$20 x 1.5 = $30 per hour.
You may also hear the term overtime premium rate, which refers to the difference between an employee’s overtime rate and straight-time rate. Using the example above, if the employee’s straight-time rate is $20 per hour, their overtime premium is $10 per hour, or the additional $10 over their straight-time rate to get their overtime rate of $30 per hour.
An org chart is a visual representation of the relationships between employees’ positions.
As seen in: Org Chart Software Guide
P
Paid time off (PTO) is a catch-all term for any paid leave you supply to your employees. You can also designate separate PTO categories for vacation, sick, personal, bereavement, and parental leave. Although the federal government does not mandate employers provide PTO to their employees, some states mandate paid sick and vacation leave and record PTO data on employee paychecks.
As seen in: How to Create the Perfect PTO Policy
Parental leave, also referred to as family leave, is a benefit given to employees who need time away from work to care for their children. It is similar to sick leave and PTO, but the stipulations for eligibility and entitlement are often more nuanced and subject to more legal requirements.
As seen in: The Employer’s Guide to Parental Leave Policies
A pay card is an employee payment method that looks and works like a debit card. Instead of a check, employees receive money directly deposited into their pay card accounts. In addition to withdrawing money, employees can use the card at physical and online stores to purchase goods and services.
As seen in: What are the Best Methods for Paying Employees?
A pay period is the timeframe companies use to calculate employees’ paychecks. Pay periods closely align with pay schedules. Where a pay schedule tells you how often employees should expect a paycheck, pay periods indicate what dates your employees worked for that payday.
For example, say you have a semi-monthly pay schedule that pays employees on the 15th and the last day of the month. Your pay period may run between the 1st and 15th of the month. Then, you use the remaining days of the month as your pay period to calculate your employees’ pay on the last day of the month.
Pay periods should be consistent with your pay schedule and cover all days in a calendar year.
Paystubs are statements employees receive alongside their paychecks. They detail the employee’s gross earnings, net earnings, taxes, and deductions for that paycheck. Employers must provide employees with copies of paystubs with each paycheck, regardless of whether they receive their pay via paper check or direct deposit.
PEO stands for professional employer organization. PEOs partner with corporations to share HR responsibilities and compliance risks.
As seen in:
Performance metrics are the quantitative and qualitative measurements that assess how well employees are doing their jobs. Companies typically represent performance metrics as key performance indicators (KPIs) or objectives and key results (OKRs).
As seen in: Top Performance Metrics Examples & What They Measure
Positive pay is a method that financial institutions use to reduce the chance of check fraud. For payroll, it involves reporting the list of check numbers, issue dates, and dollar amounts to your bank. This way, when an employee presents a check for payment, the bank can check its validity against previously authorized checks before providing the funds.
Post-tax deductions do not lower an employee’s taxable income. Instead, you deduct them from employees’ gross pay following pre-tax deductions and taxes. Examples of post-tax deductions include union dues, pet insurance, company equipment fees, garnishments, and charitable contributions.
Preboarding is the employee life cycle phase that starts when a new hire accepts a job offer and transitions to onboarding on the employee’s first day. The preboarding process involves a range of various administrative tasks and engagement activities that generate enthusiasm and help new hires feel more comfortable in their new roles.
As seen in: Onboarding Rethought: Why Your Company Should Preboard New Hires
Pre-tax deductions are deductions taken from an employee’s paycheck before you calculate certain taxes. The benefit of pre-tax deductions is that they lower the employee’s taxable income, in turn lowering the amount of taxes withheld from their paycheck.
Only a few types of deductions are considered pre-tax deductions; the most common are health insurance premiums, flexible spending accounts (FSAs), health savings accounts (HSAs), commuter benefits, and retirement contributions.
Pulse surveys are short lists of focused questions that track fast-moving trends and collect immediate feedback from employees.
As seen in: What is a Pulse Survey?
Q
Quiet hiring is the process of developing internal staff to fill critical positions or outsourcing partial job functions to independent contractors.
As seen in: What Is Quiet Hiring?
R
Reimbursements are payments you make to employees to cover business expenses. For example, you may reimburse employees for mileage costs, travel, relocation assistance, company equipment, meals, and entertainment.
Accountable reimbursements, where you reimburse employees exact amounts per receipt, are nontaxable. In contrast, providing employees with $100 for a team meal without requiring a receipt is considered a nonaccountable reimbursement and is subject to taxes.
A relocation policy outlines the processes for moving a new or current employee from one location to another. Companies typically move their employees to places where they need to be physically present to carry out their job responsibilities, especially when it involves collaborating with colleagues.
As seen in: Employee Relocation Policy 101
Reputation management is a continuous, comprehensive organizational strategy that influences and manages internal and external stakeholders’ perception of your company and its brand. It involves a balance between reactively addressing issues and proactively showcasing the company’s strengths in an authentic and transparent manner.
As seen in: Corporate Reputation Management: Best Practices & Strategy
S
Salary rate is a set pay amount an employee receives per pay period. Unlike total straight-time or overtime pay, an employee paid at a salary rate receives the same compensation per pay period with few exceptions.
Most employees paid at a salary rate are also exempt from overtime, but not always. If you pay non-exempt employees a salary rate, you must still monitor their hours and pay them at their overtime rate when applicable.
Example: Say you pay your workers semi-monthly, resulting in 24 payrolls a year. One of your employees has an annual salary rate of $60,000. This means their gross pay every payroll is $60,000 / 24 payrolls or $2,500 per pay period.
Severance pay is compensation or other benefits employers provide employees following termination. Severance pay can help keep the relationship with an employee amicable while offering them a way to pay for expenses as they look for a new job.
As seen in: Severance Pay: An Employer’s Guide to Payments and Policy
A skills gap analysis is a technique that identifies discrepancies between the skills of your current workforce and the skills your business needs.
As seen in: How to Conduct a Skills Gap Analysis
Social Security tax is the amount you and your employee pay to fund the U.S. Social Security program. It is a flat rate of 6.2% of employees’ taxable income after pre-tax deductions like health insurance and commuter benefits. As an employer, you also match this amount every paycheck.
Several states administer state unemployment insurance programs that you pay into each payroll based on your employee’s taxable income. These taxes are called SUTA (State Unemployment Tax Act) or SUI (State Unemployment Insurance). Tax rates, calculations, and taxable wage bases differ by state.
Straight-time rate is the pay rate non-exempt, hourly workers receive for any hours they work under overtime. Many conflate straight-time rate with “regular rate,” which refers to the standard pay hourly non-exempt employees and salary-exempt employees receive every paycheck.
According to the IRS, a supplemental wage is any amount paid in addition to employees’ regular wages. This includes bonuses, commissions, severance pay, rewards/prizes, and back pay. Supplemental wages are taxed differently depending on whether you issue the amount alongside the employees’ regular paycheck or separately.
You can read more about this in IRS Publication 15 Circular E.
Succession planning is the act of developing long- and short-term strategies to fill critical roles when they become vacant.
As seen in: Succession Planning Examples
T
Taxable income, or taxable wages, is the amount of your employee’s pay subject to taxation. Taxable income varies by law, but it’s usually an employee’s gross pay minus pre-tax deductions, like health insurance, child support, and retirement plans.
A taxable wage base is the maximum amount of income taxed in a calendar year. Several tax laws, including Social Security, FUTA, and SUTA, have taxable wage bases.
U
Unlimited paid time off (PTO) is a type of paid leave policy that allows employees to take off as much time as they need for vacation, sick, or personal reasons. The main caveat is that employees must manage their time effectively and meet work expectations.
As seen in: What is Unlimited Paid Time Off?
Upskilling is a strategic training and development initiative that evaluates employees’ skills in a particular area and provides the resources they need to build on them.
As seen in: Upskilling Your Workforce in 2024
V
Virtual reality (VR) training uses specialized technology — like headsets, surround sound, and gaming controllers — to teach employees new skills in a completely digital environment.
As seen in: What is VR Training?
W
W-2 forms summarize employees’ total income and taxes withheld for a calendar year. Employers must send these forms to employees by January 31 of the following year. Employees use these documents when preparing their tax returns.
The W-4 form, and state and local equivalents, is the federal form employees complete during onboarding to determine their income tax withholdings per paycheck. The form asks employees to identify their tax filing status, whether they work multiple jobs, number of dependents, and additional withholdings.
Z
Zoom fatigue — also known as virtual or video meeting fatigue — is the mental, physical, social, and emotional exhaustion a person feels after the persistent use of video conferencing software for virtual meetings.
As seen in: How to Manage Zoom Fatigue in the Workplace
