Conditions of employment, also known as terms of employment refer to the rules, requirements, and benefits associated with a specific job. Conditions of employment can include everything from an employee’s salary to their expected work hours to a company’s dress code.
Conditions of employment are typically specified in a written employment contract between an employer and employee as well as in a company’s employee handbook. Different jobs within a company may have different terms of employment, but most businesses also have a set of company-wide policies that apply to all employees.
What Do Conditions of Employment Include?
A company’s conditions of employment can include a long list of policies, rules, benefits, and more. Some of the topics that conditions of employment typically cover are:
- An employee’s job description
- An employee’s salary and benefits
- Hours that an employee is expected to work
- A company’s holiday and leave policies
- Requirements for performance reviews
- A company’s pay schedule
- A company’s dress code
- Non-compete or non-disclosure agreements
- A company’s disciplinary policy
- An employee’s FLSA exempt or non-exempt status
Some conditions of employment will be the same for most or all employees at a company. For example, every employee may be on the same pay schedule, be subject to the same disciplinary policy, and have the same company holidays off from work.
Other employment conditions are specific to a job or individual employee. For example, individual employees may have different working hours and different salaries or base wage rates. Employees may be able to negotiate during the hiring process to customize their conditions of employment.
Where Are Conditions of Employment Specified?
Conditions of employment may be specified in multiple locations. The most important place where employment conditions may be found is in an employee’s written employment contract. Conditions in a written and signed contract cannot be changed without the employer and employee agreeing to a new contract.
Employment conditions may also be specified in a company’s employee handbook or in policy memos that are sent out to employees.
Sometimes, the conditions of employment are only communicated verbally. However, this is not usually a good idea, because it can lead to disputes down the road if employers and employees don’t agree on what was said.
Determining Conditions of Employment
The US Department of Labor sets minimum requirements around conditions of employment. The federal minimum wage is a minimum condition of employment, as is overtime pay for non-exempt employees under the Fair Labor Standards Act. There are many additional rules around workplace safety. State governments may also have their own additional conditions of employment for employers in their state.
Beyond these basic legal and regulatory requirements, most conditions of employment are determined by employers. A company can set policies about where employees are required to work, what hours they’re required to work, employees’ pay schedule, disciplinary processes, and more.
However, employees also have a say in their conditions of employment. They may be able to negotiate for a higher salary or non-standard benefits during the hiring process, for example. Or they may request that their conditions allow for remote work or hours other than a typical 9-to-5 schedule. In a tight labor market, employees may have more control over their employment conditions.
Importantly, most employment in the US is at-will employment. This means that employers can fire an employee without cause at any time and employees can leave their job at any time.
Under at-will employment, employers can change any conditions of employment that are not specified in a signed contract at any time. However, employers may not change conditions of employment that are included in a written and binding employment contract.
Conditions of employment define the rules, policies, benefits, and expectations for an employee. They are typically specified in an employment contract or employee handbook. The Department of Labor sets minimum standards for terms of employment, but employers and employees can negotiate tailored conditions of employment in most cases.