What are 'Terms of Employment'

Terms of employment are conditions that an employer and employee agree upon for a job. Terms of employment include an employee's job responsibilities, work days, hours, breaks, dress code, vacation and sick days, pay and more. They also include benefits such as health insurance, life insurance and retirement plans. Terms of employment are often outlined in a contract. Employees whose skills are in higher demand will have an advantage when negotiating terms of employment. Minimum terms of employment are generally set by state or federal laws.

Breaking Down 'Terms of Employment'

The majority of employers require professional, administrative and executive employees to sign an employment agreement or contract that expresses the terms of employment. Hourly employees typically don't have to sign a contract, as their terms of employment tend to be expressed in an employee handbook or company policy manual. In cases where employees are not required to sign an employment contract, the terms of employment are generally determined by state or federal guidelines, or common law. Terms of employment as expressed in an employment contract can protect both the employee and the employer.

Common elements covered under the terms of employment and usually found in an employment contract include employee responsibilities, benefits, absence/vacation, trial periods, dispute resolution, nondisclosure or non-compete agreements, and grounds for termination. Sometimes, an employment contract can be made verbally.

Terms of Employment in the U.S.

Most employment contracts in the United States are at will, meaning that either the employer or employee can legally terminate employment at any time for any reason, though employees cannot be fired for a few legally protected reasons such religion and gender. At-will employment means that an employee can be fired even if he or she does not violate any terms of employment. However, some employees work under contracts that provide job security for the length of the contract as long as they do not violate their contract conditions.

Basic standards for terms of employment in the U.S. are set by the Department of Labor. They include rules covering the minimum wage, overtime, the standard work week and mandated break times. In some cases, labor unions can set some workplace rules.

Terms of Employment Abroad

Generally, developed and developing countries have codified certain standard terms of employment. For example, Ireland has its Terms of Employment (Information) Act which outlines rules covering a variety of workplace and labor topics. Australia's Fair Work Ombudsman sets rules related to pay, leave, redundancy, entitlements and more.

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