15 Human Resource Terms You Should Know As A Small Business Owner

Starting your own business, especially your first one, can be somewhat intimidating. You find yourself responsible for handling every aspect of the company and having to learn terminology to run your small business effectively. 

To make life simple, we have comprised a list of 15 human resource terms you should know as a small business owner.

15 Human Resource Terms You Should Know As A Small Business Owner

1) At-will Employment

At-will employment describes an employee that can be fired at any moment for any reason. As an employer, if you decide to terminate an employee, the employee has limited legal rights to fight the termination. At-will employment also stipulates that an employee may leave at any time for any reason with or without notice.

2) Americans with Disabilities Act

Commonly referred to as the ADA, The Americans with Disabilities Act ensures equal opportunities for people with disabilities in areas of employment, public accommodations, transportation, and government services.

3) Background Check

A term we have all heard at least once in our life. A background check is a form of investigation into a potential employee’s background regarding their employment history, education, criminal record, license record, and even a credit check, if necessary.

4) Employee Benefits

Employee benefits are incentives provided to employees received in addition to wages. Standard benefits include health insurance, pension plans, sick leave, vacation time, retirement, etc.


No, we’re not referring to a snake (Laughing emoji). COBRA stands for The Consolidated Omnibus Budget Reconciliation Act which was passed in 1985. This law requires employers with 20 or more employees that offer health care benefits to also provide a continuing coverage option to those who lose their benefits due to termination or reduction in hours.

6) Employee vs. Independent Contractor

Employee – a person hired to perform services for a company.

Independent Contractor – an individual who provides goods or services to another individual or business.

7) Onboarding

Onboarding refers to the process of welcoming and integrating a new employee into your company. This process typically starts with a background check and includes everything from completing required paperwork to being introduced to co-workers.

8) Equal Employment Opportunity (EEOC)

More than likely you have heard this term several times throughout the years but never knew what it meant. The EEOC is an organization that is responsible for enforcing federal laws which makes it illegal to discriminate against an applicant for several factors, including race, color, sex, religion, age (40 or older), disability, etc.

9) Exit Interview

A conversation with an employee who is preparing to leave the organization. This interview helps the employer gain a better understanding of why the employee decided to leave and hear about their overall experience while at the organization. 

10) Fair Labor Standards Act (FLSA)

The FLSA establishes the amount of minimum wage and overtime pay; recordkeeping, and child labor standards that affect both full-time and part-time employees.

Little known fact: The Wage and Hour Division of the U.S. Department of Labor enforces the FLSA.

11) Family and Medical Leave Act (FMLA)

The FMLA provides individual employees with up to 12 weeks of unpaid, job-protected leave per year and group health benefits to be maintained during that leave. This law applies to all public agencies.

12) Labor Law Poster

A labor law poster is mandated by state and federal employment law and provides notice for employers that must be posted in an area frequently visited by all employees. These posters are typically posted in hallways, break rooms, etc.

13) Minimum Wage

Minimum wage is the lowest wage permitted by law (from a federal or state level) that a worker can be paid. Currently, the federal minimum wage for covered non-exempt employees is $7.25 per hour – this has been unchanged since 2009.

14) Performance Review

A performance review is a discussion between the employer and employee that evaluates and documents the employee’s job performance.

15) Workers’ Compensation

Often referred to as “worker’s comp,” worker’s compensation is a form of insurance that provides benefits to employees who suffer job-related injury or illness.


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