What, Exactly, Is an Employee?

Employees Have Distinct Difference Between How They Are Classified and Paid

Woman informs employee that the business has to implement employee furloughs to keep the business from going out of business.
••• Jose Luis Pelaez Inc/Blend Images/Getty Images

An employee is an individual who was hired by an employer to do a specific job. The employee is hired by the employer after an application and interview process results in his or her selection as an employee. This selection occurs after the applicant is found by the employer to be the most qualified applicant to do the job.

The terms of an individual’s employment are specified by an offer letter, an employment contract, or verbally. In a nonunion workplace, every employee negotiates on their own the terms of employment. Many do not negotiate at all by choosing to accept the offer that the employer makes to them. Others ask for $5,000 more to see if they can start with a higher salary. 

In workplaces that are represented by a union, the collective bargaining agreement covers most aspects of an employee’s relationship with the workplace including compensation, benefits, hours of employment, sick time off, and vacation. The contract also protects the rights of the unionized employee and gives the employee options to grieve workplace treatment.

Most employees who work in service or product creating roles have a narrow range of potential salary offers since their jobs are defined with a salary range and benefits in mind. Employees who are senior leaders and managers are more likely to receive their job offer in an employment contract.

What Does an Employee Do?

An employee works part-time, full-time or is temporary in a job assignment.

An employee barters his or her skills, knowledge, experience, and contribution in exchange for compensation from an employer. An employee is either exempt from overtime or not exempt from overtime; the rules about paying an employee are governed by the Fair Labor Standards Act (FLSA).

An exempt employee is paid for accomplishing a full job in as many hours as necessary to accomplish it. Employers must pay the non-exempt employee for every hour worked as they are paid by the hour.

When an employee is classified as a non-exempt employee, the employer must set up a time tracking system to ensure that the employee is legally paid for every hour worked and for overtime for every hour worked past 40. in one week, and more than 8 hours in one day in some states (Alaska, California, and Nevada) or 12 hours in Colorado.

New rules are going into effect that make further distinctions about who is exempt and who is nonexempt based on the amount of money an employee is paid in a year. You'll want to pay attention to the changing rules about employee classification as they will affect most workplaces.

As of Dec. 1, 2016, new overtime rules will extend overtime protections to an additional 4.2 million employees in the United States by raising the salary threshold from $23,660 per year to $47,476. This means that nearly all workers on lower salaries are entitled to time-and-a-half pay whenever they work more than 40 hours in a week. See more about the rule changes.

More about Employees and Their Jobs

Each employee has a specific job to accomplish that is often defined by a job description. In responsible organizations, a performance development planning process defines the work of the employee and the organization’s expectation’s for the employee’s performance.

It should also help employees set goals and track their performance. Additionally, the performance management system should help employees develop their ongoing skills and adopt a career path.

An employee works within a functional area or department such as marketing or Human Resources. An employee has a boss, the person he or she reports to and takes direction from, usually a manager or supervisor. An employee should have the expectation that he or she will receive reasonable, professional treatment from the manager. An employee also has coworkers who work with them to accomplish the work of the department.

The employee has a workstation or an office in which he or she accomplishes the job. The employer supplies the employee with the tools and equipment necessary to perform work such as a computer, telephone, cell phone, laptop, desk, and supplies.

In forward-thinking organizations, the employee receives frequent performance feedback from the manager, rewards and recognition, and a reasonable benefits package.

Although most employment relationships are at-will, the employee who performs the job successfully is likely, although not guaranteed, to keep the job.

More About Work in Organizations

Alternate Spellings employe (agreed upon spelling in some companies)