HR GLOSSARY · 72 TERMS
HR terms, clearly defined.
A small, well-edited reference — clean definitions you don't need an HR degree to follow, plus country-specific context where it changes the answer (Germany, France, UK, US, and more). No signup, no email gate.
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- A1 certificateAn A1 certificate is an EU social-security document that proves a worker remains covered by their home country's social security system while temporarily working in another EU/EEA/Switzerland member state. It prevents double social-security contributions and is mandatory documentation during posted-work assignments, business trips with paid work, and certain cross-border arrangements.
- Absenteeism rateAbsenteeism rate is the percentage of scheduled working days lost to unplanned absences — typically unscheduled sick days, no-shows, and emergency leave (planned vacation and approved leave are excluded). High absenteeism is a leading indicator of engagement problems, manager issues, or genuine health concerns in a team.
- ADA reasonable accommodationUnder the US Americans with Disabilities Act (ADA), employers with 15+ employees must provide reasonable accommodation to qualified employees and applicants with disabilities — modifications to the work environment, schedule, or job duties that enable the employee to perform the essential functions of their job — unless the accommodation would impose an undue hardship on the employer.
- Annual leaveAnnual leave is statutory paid vacation time that employees are entitled to each year. Most jurisdictions mandate a minimum (usually 20-30 working days for full-time employees); employers can offer more.
- At-will employmentAt-will employment is a US doctrine under which either the employer or the employee can end the working relationship at any time, for any reason that isn't illegal, with no advance notice required. It's the default everywhere in the US except Montana — but it does not exist in the EU or the UK, and is rare anywhere outside the US.
- ATSAn ATS (Applicant Tracking System) is recruiting software that manages job postings, candidate applications, interview pipelines, and hiring decisions. It sits adjacent to the HRIS — most companies use a dedicated ATS for hiring, then transfer the accepted candidate into the HRIS as a new employee on contract signing.
- Attrition rateAttrition rate is the percentage of employees who leave a company over a defined period through any means — voluntary resignations, retirements, terminations, deaths, role eliminations. In strict usage, attrition specifically refers to departures whose positions are NOT refilled (workforce reduction by natural means). In common usage, "attrition" and "turnover" are used interchangeably.
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- COBRACOBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) is a US federal law that requires group health plans of employers with 20+ employees to offer continuation coverage to employees and their dependents who lose health insurance due to certain qualifying events — typically termination, hours reduction, divorce, or aging out of dependent status. The former employee pays the full premium plus a 2% administrative fee.
- Collective bargaining agreementA collective bargaining agreement (CBA) is a written contract between an employer (or employer association) and a labor union representing employees, setting pay rates, working hours, benefits, dispute procedures, and other employment terms. CBAs are common in EU industrial relations (some sectors covered 80%+) and certain US industries (manufacturing, healthcare, public sector); they bind both signatories and apply to all covered employees.
- Constructive dismissalConstructive dismissal is when an employee resigns because the employer's conduct has made continued employment intolerable — and the resignation is legally treated as a termination by the employer. The doctrine lets a court award unfair-dismissal remedies even though the employee technically quit.
- Cost-per-hireCost-per-hire is the total dollar amount a company spends to fill an open role, divided by the number of hires made in the same period. It captures every line item that touched the funnel — recruiter salaries, job-board fees, agency commissions, assessment tools, candidate travel, interview-team time, and onboarding setup.
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- Employee handbookAn employee handbook is the canonical document that describes a company's policies, employment terms, and behavioral expectations. It functions both as a reference for employees and as legal evidence that policies were communicated.
- Employee offboardingEmployee offboarding is the structured process of transitioning a departing employee out of the company, covering final pay, knowledge transfer, system access revocation, equipment return, and documentation.
- Employee onboardingEmployee onboarding is the structured process of bringing a new hire from offer-accepted to fully productive in their role. Done well, onboarding compresses time-to-productivity from months to weeks and materially lifts year-one retention.
- eNPS (Employee Net Promoter Score)eNPS is a single-question employee-engagement metric adapted from the customer-facing Net Promoter Score. It asks "On a 0-10 scale, how likely are you to recommend this company as a place to work?" — and computes a score between -100 and +100. It's simple, easy to trend, and prone to misuse if it's the only number HR tracks.
- EORAn EOR (Employer of Record) is a third-party company that legally employs workers on behalf of a client company in jurisdictions where the client has no local entity. The EOR handles payroll, taxes, benefits, statutory contributions, and compliance; the client manages the work day-to-day. Used heavily for cross-border hiring without setting up subsidiaries.
- Equity compensationEquity compensation is pay delivered as company shares (or rights to shares) rather than cash. The most common forms in modern companies are stock options (right to buy at a fixed price), RSUs (restricted stock units, granted directly), and ESPPs (employee stock purchase plans). Used heavily in startups and tech companies to align employees with long-term company outcomes.
- EU Whistleblower DirectiveThe EU Whistleblower Directive (Directive 2019/1937) requires EU member states to provide legal protection to people who report breaches of EU law in a work-related context — covering retaliation prohibition, mandatory internal reporting channels for organizations with 50+ employees, and confidentiality protections. Transposition deadline was December 2021 for member states; private-sector compliance for 50-249 employee firms was December 2023.
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- FLSA exempt vs non-exemptUnder the US Fair Labor Standards Act (FLSA), employees are classified as exempt (salaried, not entitled to overtime) or non-exempt (hourly, entitled to overtime at 1.5× regular rate for hours over 40 in a workweek). Misclassification — paying as exempt when the role does not meet the legal test — is one of the most common and expensive US employment law violations.
- FMLAThe FMLA (Family and Medical Leave Act of 1993) is a US federal law that entitles eligible employees of covered employers to up to 12 weeks of unpaid, job-protected leave per year for specified family and medical reasons — with continued group health insurance coverage and the right to return to the same or equivalent position.
- FTE (Full-Time Equivalent)FTE (Full-Time Equivalent) converts headcount with mixed working schedules into a single comparable number. One full-time employee equals 1.0 FTE; one half-time employee equals 0.5 FTE; two quarter-timers equal 0.5 FTE combined. It is the standard unit for budgeting, productivity ratios, and grant reporting.
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- Garden leaveGarden leave is a notice-period arrangement where an employee is paid in full, kept on the payroll, but barred from coming to the office, accessing systems, or working for anyone else. Used to keep departing employees away from clients, sensitive data, and competitors during their notice window.
- GDPR for HRGDPR (General Data Protection Regulation, EU 2016/679, in force May 2018) regulates the processing of personal data of EU residents — including employee data. For HR specifically: every piece of employee information is "personal data," processing requires a lawful basis, employees have rights of access/rectification/erasure, and violations can trigger fines up to €20 million or 4% of global annual turnover (whichever higher).
- Gross vs net salaryGross salary is the amount stated in the employment contract before any deductions. Net salary is what lands in the employee's bank account after income tax, social-security contributions, and pension contributions are withheld. The gap between them varies by country, typically 15% to 45%.
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- HCMHCM (Human Capital Management) is HR software that extends beyond the core employee record (the HRIS layer) into strategic processes — performance, learning, succession, workforce analytics, and compensation planning. Most enterprise HR suites brand themselves HCM; most SMB suites do HCM under a different name.
- Headcount planningHeadcount planning is the structured forecasting of how many people a company will need, in what roles, by when — and the budgeting of the salary, benefits, and recruiting costs to support that plan. Typically annual with quarterly revisions, tightly coupled to the financial plan.
- HRISAn HRIS (Human Resources Information System) is the system of record for employee data — personal details, contracts, leave balances, payroll inputs, and org structure — usually delivered as cloud software a team can run without specialist IT.
- HRMSAn HRMS (Human Resource Management System) is HR software that combines the employee record of an HRIS with workflow automation — onboarding, leave approvals, time tracking, performance, and offboarding. In modern HR tools, "HRMS" and "HRIS" are usually the same product under different marketing labels.
- Hybrid workHybrid work is an employment arrangement where employees split time between working remotely (from home or elsewhere) and on-site (at company offices), typically on a defined schedule — for example, three days in-office plus two days remote per week. The arrangement became dominant after the 2020-2021 COVID-19 remote-work shift, displacing both fully on-site and fully remote as the modal pattern for knowledge work.
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- I-9 formForm I-9 is a US Department of Homeland Security document used to verify the identity and employment authorization of every person hired to work in the United States — citizens and non-citizens alike. The employer must complete Section 2 within 3 business days of the new hire's start date, examining acceptable identification documents.
- Independent contractorAn independent contractor is a worker who provides services to a client under a commercial contract rather than an employment relationship. They invoice for completed work, manage their own taxes and social contributions, and do not receive employment benefits, statutory leave, or severance.
- IR35IR35 (formally the off-payroll working rules) is UK tax legislation that targets "disguised employment" — situations where a worker provides services through their own intermediary company (typically a personal service company / limited company) to a client, when the actual working relationship would be employment if the intermediary did not exist. If IR35 applies, the engagement is taxed broadly as employment income.
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- NDAAn NDA (Non-disclosure agreement) is a contract under which one or both parties agree not to disclose specified confidential information. In employment contexts, NDAs protect trade secrets, customer lists, internal data, and product roadmaps — typically signed at hire and surviving termination.
- Non-compete clauseA non-compete clause is a contract provision that restricts an employee from joining a competitor or starting a competing business for a defined period after leaving the company. Enforceability varies sharply by jurisdiction — banned in California and several other US states, capped by EU member-state rules, and increasingly limited globally for low-wage workers.
- Notice periodA notice period is the time between when termination is announced and when employment actually ends. It is set by law, employment contract, or both — and may be served on the job, on garden leave, or paid in lieu (PILON).
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- Parental leaveParental leave is time off granted to a parent (mother or father) to care for a newborn or newly adopted child. The structure — paid vs unpaid, mandatory vs optional, mother-only vs both parents — varies dramatically by country.
- Pay equityPay equity is the principle that employees performing similar work should receive similar compensation, with disparities only allowed for legitimate factors (experience, performance, location, role complexity). The concept covers gender pay gap, racial pay gap, and broader fairness in compensation structures.
- Pay transparencyPay transparency is the practice of openly sharing salary information — pay ranges in job posts, internal compensation bands, or full salary disclosure across the company. In the EU, the Pay Transparency Directive (effective June 2026) requires employers to publish pay scales in job posts and report gender pay gaps above thresholds.
- Payroll cycleA payroll cycle is the recurring period over which employee work is measured and paid — weekly, bi-weekly, semi-monthly, or monthly. The frequency is governed by local labor law minimums, by company cash-flow practice, and by employee preference (which often gets the loudest vote even when it shouldn't).
- PEOA PEO (Professional Employer Organization) is a third-party company that enters a co-employment relationship with a client — the PEO becomes the legal employer-of-record for payroll, tax, benefits, and compliance purposes while the client retains operational control over hiring, firing, and day-to-day work. Primarily a US construct, though similar models exist in other markets.
- Performance reviewA performance review is a structured assessment of an employee's work performance over a defined period, typically tied to compensation decisions, development planning, and continued employment.
- PIP (Performance Improvement Plan)A PIP is a formal, time-bound document that names specific performance gaps, defines measurable success criteria, sets a deadline (typically 30-90 days), and states the consequences if the criteria aren't met. Used to either rehabilitate an underperforming employee — or to create the paper trail needed for a defensible termination.
- Probationary periodA probationary period is the initial phase of employment during which either party can terminate the contract with reduced notice and severance obligations. Most labor codes cap probation at between one and six months, depending on the country and seniority of the role.
- PTO (Paid Time Off)PTO (Paid Time Off) is a category of paid leave an employee can use for any reason — vacation, personal time, or short illness — without specifying the purpose. It contrasts with separate-bucket models that split vacation, sick, and personal leave into distinct allotments.
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- Salary bandA salary band is a defined pay range — minimum, midpoint, maximum — assigned to a role or level. Bands replace ad-hoc per-employee negotiations with a structured framework that maps level to expected pay, enabling fairness, transparency, and budgeting predictability.
- Severance paySeverance pay is the compensation an employer pays to a departing employee, typically required by law or contract when the employer initiates the termination without cause. The exact amount depends on local labor law, length of service, and the reason for termination.
- Sick leaveSick leave is paid time off taken due to illness, injury, or medical procedure that prevents an employee from working. Most jurisdictions mandate a minimum statutory entitlement; many employers offer more.
- Statutory Sick Pay (SSP)Statutory Sick Pay (SSP) is the UK's legally mandated minimum sick pay — £123.25 per week or 80% of the employee's average weekly earnings, whichever is lower (the 2026-27 rate, as of September 2026), paid by the employer from the first full day of sickness absence. SSP can be paid for up to 28 weeks for any one period of sickness. Many employers offer "company sick pay" on top of SSP as a competitive benefit.
- Succession planningSuccession planning is the deliberate process of identifying and developing employees to fill key positions when current incumbents leave. It covers planned departures (retirement, promotion), unplanned departures (sudden resignation, illness), and the development arc needed to make internal candidates ready before the gap opens.
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- TenureTenure is the length of time an employee has been continuously employed by a company. Reported as average tenure across the workforce, median tenure, or tenure distribution across cohorts. Tenure correlates with productivity, retention risk, and statutory benefits in most jurisdictions.
- Time-to-fillTime-to-fill is the number of days from when a hiring requisition is approved (or a role is opened) to when an offer is accepted. It measures how fast vacancies close — the hiring manager's view of the process. Distinct from time-to-hire, which counts from when a candidate enters the funnel.
- Time-to-hireTime-to-hire is the number of days from when a candidate enters your hiring funnel (first application or first contact) to when they accept the offer. Lower is better — but only up to the point where speed compromises quality of fit. Distinct from time-to-fill, which counts from when the role opens.
- TOIL (Time off in lieu)TOIL is paid time off granted to an employee instead of overtime pay, in exchange for hours worked beyond the standard schedule. Common in UK/Ireland/Australia. The employee banks the extra hours and uses them as time off later, usually at a 1:1 or 1.5:1 ratio depending on whether the overtime was at premium rate.
- Total compensationTotal compensation (also "total rewards" or "total comp") is the full economic value of what an employee receives in exchange for their work — covering base salary, cash bonuses, equity grants, employer-paid benefits (health, retirement contributions, life insurance), paid time off, perks, and statutory contributions. Total compensation is the right comparison metric when evaluating offers across companies or countries with very different benefit structures.
- TUPETUPE (Transfer of Undertakings, Protection of Employment Regulations) is UK legislation — and an EU-wide equivalent under the Acquired Rights Directive 2001/23/EC — that automatically transfers employees from one employer to another when a business or service changes hands. Employees keep their existing terms, continuous service, and protections; dismissals connected to the transfer are automatically unfair without ETO (economic, technical, organizational) justification.
- Turnover rateTurnover rate is the percentage of employees who leave the company over a given period (typically 12 months), calculated as departures divided by average headcount. It's the single most-tracked workforce health metric — high or rising turnover is usually a leading indicator of culture problems, comp gaps, or management issues.
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- W-2 vs 1099In US tax terminology, W-2 refers to employees (the employer withholds income tax, Social Security, and Medicare; the employer pays half of FICA payroll taxes) and 1099 refers to independent contractors (the worker is responsible for their own tax, including the full self-employment tax). The classification is determined by the working relationship — not by the contract label — and misclassification triggers IRS back-tax liability.
- WARN ActThe WARN Act (Worker Adjustment and Retraining Notification Act of 1988) is a US federal law requiring employers with 100+ employees to give 60 calendar days' advance written notice of a mass layoff or plant closing to affected workers, state agencies, and local government. Failure to provide notice triggers liability for back pay, benefits, and civil penalties for the missed notice period.
- Working hours and overtimeWorking hours regulations cap how many hours an employee can be required to work per day and per week, and define the premium pay rate (overtime) for hours worked beyond that cap.
- Works councilA works council is an elected body of employee representatives at the workplace level with legally defined consultation and co-determination rights on workforce matters — most strongly established in Germany, Austria, the Netherlands, and across the EU. Different from a trade union: works councils are workplace-specific, are elected by all employees regardless of union membership, and operate independently from union negotiations.
- Wrongful terminationWrongful termination is a dismissal that violates an employment contract, statute, or public policy — for example, firing in violation of an explicit contract clause, in retaliation for protected activity (whistleblowing, union organizing, complaints of harassment), or on a protected discriminatory basis. Remedies typically include reinstatement, back pay, damages, and sometimes punitive penalties.
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