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Employment Law Overview | evident

Employment Law refers to the broad area of law which governs all aspects of the employee-employer relationship.

Conference room, workplace, office
June 29, 2023
Boardroom where employer and employees would meet

What is Employment Law?

The term Employment Law refers to a broad area of law which includes all aspects of the employee - employer relationship. It includes thousands of federal and state statutes, regulations, and judicial decisions, and at times it can be quite complicated.

But in its simplest form, Employment Law just refers to the rights of employees, the rights of employers, and the rules that govern the relationship between the two.

So whether it’s how much sick leave you are entitled to or laws governing harassment in the workplace, many things fit under the umbrella term of Employment Law.

Key Takeaways

Employment Agreements

You’ll probably be given a lot of documents when you start a new job, some that you’ll be asked to sign and others that you won’t. One of the most important of these documents is an Employment Agreement, which represents your contract with your employer.

Oftentimes Employment Agreements are written contracts that you sign, but they can also be based on oral statements or implied through conduct. The most conventional example is a written document that sets out the key terms of your employment, basically detailing the rights and responsibilities you and your employer each have.

Examples of the key terms often included in Employment Agreements are:

  • Salary
  • Benefits
  • Start date

Your Employment Agreement may also cover such topics as confidentiality obligations or non-compete agreements, as well as whether you are an at-will employee (more on this below).

Keep in mind, though, that some key information you’ll care about may be addressed in other documents. For example, how many vacation days you get each year or details about parental leave might be contained in documents such as your employer’s policies or an employee handbook.

Even if you did not sign a written contract when you started working, there may be an oral or implied agreement between you and your employer. For instance, if your employer promised to pay you a certain salary, or to employ you for a certain period of time, these promises can be legally binding even if they are not written down.

An implied agreement might also exist based on the conduct of you and your employer.

But, if there ever is a dispute, things can get complicated quickly if there isn’t a written contract. And let’s be honest, things can get complicated regardless. But having a written contract can help avoid some of the mess by clearly stating the terms you and your employer agreed to.

At-Will Employment

At-will employment means that you can quit your job at any time. But it also means that your employer can terminate your employment (i.e., fire you) at any time too - with or without cause and with or without notice.

Now that does not mean that you need to show up to work every day afraid that your job is on the line. But, it is an important dynamic to be aware of if you are an at-will employee, which many people are.

In most states, if you have not received any specific promises or signed an employment contract which says otherwise - for instance, stating that you cannot be fired without good cause, or that you cannot be fired for a fixed period of time - then you are probably an at-will employee. Many Employment Agreements also expressly state that you are an at-will employee.

But even if you are an at-will employee, your employer may not fire you for an illegal reason. For instance, your employer generally cannot fire you for discriminatory reasons such as on account of your race, gender, sexual orientation, or religion. (More on Employment Discrimination below).

Additionally, an employer cannot fire you as retaliation for certain protected conduct such as making a harassment claim or reporting public health and safety violations at your company.

If you have been fired for any of these reasons, you may have a claim for wrongful termination.

Wrongful Termination

A wrongful termination occurs if your employer fires you improperly, either because it violates the law or your employment agreement. Even at-will employees who may generally be fired at any time, with or without cause, may be the subject of a wrongful termination.

Examples of wrongful terminations include:

Examples of wrongful termination include breach of contract, discrimination, and retaliation
  • Breach of contract - A straightforward example is if your employer promised to employ you for at least a year, it would be a breach of contract to fire you after six months.
  • Discrimination - It is illegal for most employers to fire someone on the basis of certain protected factors such as their race, gender, sexual orientation, or religion.
  • Retaliation - Your employer cannot retaliate against you, including by firing you, for exercising certain rights such as formally complaining about workplace harassment or discrimination; reporting the company for public health and safety violations; becoming a whistleblower under laws such as the False Claims Act; or taking qualified leave under the Family Medical Leave Act.

If you have been wrongfully terminated, you may be entitled to damages including: backpay, reinstatement, compensatory damages, punitive damages and attorney’s fees. (“Damages” really just means money in this context).

There may be important deadlines and procedural requirements involved in pursuing your claim. For instance, if you think you were wrongfully terminated due to discrimination, you typically have to file a complaint with a government agency (such as the EEOC) before you can sue your employer in court. (More on this in our Employment Discrimination section below).

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Employment Discrimination

State and federal law prohibit discrimination against employees on the basis of:

  • Race or color
  • Religion
  • Sex (including gender identity, transgender status, and sexual orientation)
  • Pregnancy
  • National origin
  • Disability
  • Age
  • Genetic information (which includes the results of genetic tests as well as family medical history)

The Equal Employment Opportunity Commission (EEOC) is responsible for enforcing federal laws prohibiting discrimination. It has authority over any employer with 15 or more employees as well as all federal agencies.

Many states also have their own anti-discrimination laws, and their own state agencies that enforce those laws. State laws often apply to even more employers than are covered by federal law. (For instance, for all employers with five or more employees, not just 15 or more).

There are key procedural requirements and deadlines to keep in mind for employment discrimination claims. For instance, if your employer is subject to EEOC authority, you must file a claim (called a “Charge of Discrimination”) with the EEOC before you file a lawsuit in court.

Additionally, the EEOC requires that a claim be filed within 180 days of the day that the discrimination took place, though the deadline may be longer for certain state agencies.

More information on how to file a claim with the EEOC can be found here.


Harassment is considered a form of employment discrimination and is not allowed in the workplace. Sexual harassment is one of the common forms of unlawful workplace harassment, but there are other types as well.

Illegal workplace harassment occurs whenever an employee endures severe or pervasive treatment based on a protected characteristic (such as race, color, religion, age, sex, gender identity, or disability) that creates a hostile work environment. Additionally, if you have to endure the offensive conduct in order to maintain your employment, that is unlawful harassment.

Small annoyances and isolated incidents are generally not enough to push conduct over the line to being unlawful. So that coworker who microwaves fish in the break room, or one mildly offensive joke? Probably doesn’t rise to the level of illegality, however wrong such conduct may be!

But, the more serious the conduct or the more frequently that it happens, the more likely it is to be found to create a hostile work environment.

Keep in mind that anyone affected by the conduct, and not just the person who is harassed, can be a victim.

Minimum Wage + Overtime

Federal law, most states, and some local governments have minimum wage requirements. The federal minimum wage is $7.25 per hour, and state minimum wages vary greatly.

The good news is that you are entitled to whatever is highest between the federal, state and local minimum wage where you work. Information on state minimum wage laws is available here.

But not all workers are covered by minimum wage laws. For example, these laws generally apply to employees but not independent contractors, and they do not cover all employees.

One of the main exceptions is employees who receive tips. Under federal law, employers can pay these workers much less than the minimum wage, as long as their hourly wage plus their average earnings from tips are at least as much as the minimum wage.

Basically, your wages can be lower, but only if your tips make up the difference. Some states still require employers to pay these employees the applicable minimum wage regardless of what they make in tips.

Other categories of workers who are excluded from minimum wage laws include:

  • Young workers and student workers
  • Seasonal and recreational workers
  • Certain categories of farmworkers
  • Certain categories of white-collar workers
  • Commissioned salespeople (but again, only if their hourly wage + commissions are at least equal to what minimum wage would pay)

As mentioned, minimum wage laws also do not apply to independent contractors. But one thing to keep in mind - the line between employees and independent contractors can be blurry, and sometimes it’s hard to know which side you fall on.

If you have questions about minimum wage laws or think your employer may have misclassified you as an independent contractor, it may be worth speaking with an employment lawyer.


You work a lot. Are you entitled to overtime pay? It depends.

If you work more than 40 hours in a week - or in some states, more than eight hours in a day - you may be entitled to “time and a half” for those extra hours you work.

Not all employers are required to pay overtime, though. The two key questions are:

  1. Whether your employer is covered by the Fair Labor Standards Act (FLSA) or a state-specific law requiring it to pay overtime
  2. And whether you are an exempt or non-exempt employee

The FLSA covers employers that have more than $500,000 in annual revenue, or that engage in interstate commerce. Information on state overtime laws is available alongside state minimum wage laws here.

So, what does it mean to be an exempt employee? Basically, if you are exempt, you are not entitled to overtime. If you are not exempt, then you are entitled to overtime.

All that really means is that there are exceptions to who gets overtime pay, and the so-called exempt employees are the exceptions. Some of these exceptions include:

  • Independent contractors
  • Seasonal or recreational employees (like at a camp or ski resort)
  • Certain white-collar workers who are paid on a weekly salary as opposed to an hourly rate

Unemployment Benefits

If you lost your job through no fault of your own, you are not alone. Historic numbers of American have lost their jobs recently.

To help you through a period of unemployment, you may be entitled to cash benefits through unemployment insurance in order to get through these tough times if you meet certain other eligibility requirements.

Average weekly benefits are about $320 (not including extra federal aid passed by Congress in response to the Coronavirus pandemic). The average weekly benefits varies greatly by state, though, ranging all the way from $44 in Oklahoma to nearly $500 in Washington

For more detailed information, check out our article on whether you qualify for unemployment benefits. But here are the basic elements you need to know.

The Basics of Unemployment Insurance Eligibility

Every state has its own unemployment insurance program and the eligibility requirements vary, but typically you qualify if:

  • You are unemployed through no fault of your own
  • You meet certain work and wage criteria (meaning you earned a certain amount of wages during what’s called a “base period”)
  • You satisfy any additional requirements in your state

Keep in mind that you are required to be able and available to work, as well as actively seeking employment in order to qualify under most state programs.

“No fault of your own”

In most states, being unemployed “through no fault of your own” basically means that you were let go because there wasn’t enough work to go around. The key issues people might run into are:

  • If you quit without good cause, or
  • If you were terminated with good cause

States have different standards for what counts as “good cause” in both scenarios. For example, if your employment was terminated, consider the difference between general layoffs versus failing a drug test. If you quit, consider the difference between quitting for medical reasons versus just wanting some time off.

Work and wage requirements?

In most states, you also need to have worked a certain amount of time or earned a certain amount of money (or both) during what’s called a “base period.”

The base period in most states is the first four out of the five most recently completed calendar quarters. For example, if you apply in March 2021, the base period would be October 1, 2019 through September 30, 2020.

Timeline example of a base period

To learn more about the work and wage requirements in your state, more information about the programs in each state is available here.

Vacation Days

Most employers offer paid vacation days even though they aren’t required to by law.

And since they’re not legally required to offer paid vacation, employers have a lot of flexibility over their vacation policies. In fact, employers are pretty much free to decide how many vacation days they want to offer and which employees get paid vacation time at all.

As long as they do not illegally discriminate between employees - for instance, based on protected traits such as race, gender, or religion - employers are allowed to offer vacation days to some employees and not to others. One example might be offering paid vacation to full-time employees but not to part-time employees.

Employers are also free to:

  • Determine how and when vacation accrues
  • Set caps on how much vacation time can accrue
  • And set restrictions such as on when employees may take vacation, or how many vacation days can be taken at one time

The main legal limitation on how employers set their policies is that some states prohibit so-called “use it or lose it” policies. In these states, vacation time must be paid out (basically as a form of earned wages) when an employee quits or is terminated.

And keep in mind that a company may have a policy of paying out unused vacation days at the end of an employee’s tenure even if it is not required to by law.

Family Medical Leave Act

Sometimes life throws you a curveball and you need some time away from work. The Family Medical Leave Act (FMLA) is a federal law that applies to companies with fifty or more employees and allows eligible employees to take unpaid leave for qualifying reasons.

Qualifying reasons for a leave of absence under the FMLA include:

  • Illness
  • The birth or adoption of a child
  • Caring for a sick family member
  • And military caregiver leave

In order to qualify for FMLA leave, you have to meet certain eligibility requirements, such as:

  • You must have worked at the company for at least 12 months. It doesn’t need to have been 12 consecutive months, but even breaks in service - as long as the break did not last for seven years or more - do not disqualify you.
  • You must have worked at least 1,250 hours during the 12 month period leading up to when you want to take FMLA leave.
  • You must work at a worksite that has 50 or more employees within a 75-mile radius. (Note - this is generally measured as the car drives, so to speak, and not as the crow flies).

And if you qualify, your employer is prohibited from discriminating or retaliating against you for exercising your right to take FMLA leave.

Workers’ Compensation

If you’ve been hurt or gotten sick on the job, you may be entitled to workers’ compensation.

Workers’ comp is a state-mandated program that requires employers to carry insurance in case their employees get injured or sick from a work-related cause. (The federal government also has a separate workers’ comp system which mostly applies to federal employees).

Because it is a state-mandated program, the details and requirements vary by state. Contact your state’s workers’ comp office (details available here) for the most up to date information about the details in your state.

Generally speaking, employees eligible for workers’ comp are entitled to four kinds of benefits:

  • Payment of medical bills
  • Weekly compensation
  • Permanent impairment benefits
  • Vocational rehabilitation (or job retraining)

The amount of weekly compensation you are entitled to depends on whether your injury is considered permanent or temporary, and whether it is considered total or partial.

Depending on these classifications, your weekly compensation is calculated based on your average earnings prior to the injury, discounted by your current earning capacity (if you have a partial as opposed to total disability). Most states have set a maximum weekly benefit at about $1,000 per week.

How long you will be able to receive weekly benefits varies state by state. There is generally no time limit on weekly benefits for permanent disability benefits, although some states stop weekly benefits when the employee turns 65. For temporary disability, the time limits vary by state but are generally in the range of three to seven years.

For more information, see our articles about how much a workers' compensation lawyer costs, questions you should ask a workers' comp lawyer, and the key factors to evaluate whether you should hire a workers' comp lawyer.