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EARLY RETIREMENT AGE (PENSION PLANS). The age when an employee is first permitted to retire and to elect either immediate or deferred receipt of income. If payments begin immediately, they are generally paid in a reduced amount. Company consent to the election may or may not be required.

EARNED HOURS. The product of pieces or quantity produced times the times standard, usually in hours. Used as the basis for measuring labor productivity, computing incentive earnings, or measuring efficiency (performance).

EARNED RATE. Used to denote pay rate for job performed, as in the case of job transfer.

EARNINGS. Remuneration for services performed during a specific period of time. The term invariably carries defining words, e.g. hourly, daily, weekly, annual, average, gross, straight-time hourly earnings. Since a statistical concept is usually involved in the term and its variations, the producers and users of earnings figures have an obligation to define them. The Bureau of Labor Statistics, in its wage surveys, defines straight- time earnings to exclude premium pay (for overtime and for work on weekends and holidays) and shift differentials. Compensation is a term sometimes used to encompass the entire range of wages and benefits, both current and deferred, which workers receive out of their employment.

EARNINGS EFFICIENCY. Actual earnings, normally calculated in terms of earned hours, compared to standard or expected earnings.

ECONOMIC OPPORTUNITY ACT. A 1964 act “to mobilize the human and financial resources of the Nation to combat poverty in the United States,” which includes the work-training program (administered by the U.S. Department of Labor), is directed to encourage young unemployed persons (age 16- 21, inclusive) to stay in school or obtain job experience that would prepare them for meaningful work careers.

ECONOMIC SUPPLEMENTS. A type of compensation for employees including things like pensions, vacations, paid holidays, sick leave, health and insurance, and supplemental unemployment benefits.

ECONOMIC STRIKES. Union-authorized strikes to bring about changes in wages, hours, or working conditions, usually associated with an impasse in contract negotiations.

EDUCATIONAL ASSISTANCE. Reimbursement of all or a share of tuition and expenses for an employee’s studies at a training institution not directly associated with the employee’s firm.

EFFICIENCY. A measure of work performance determined by comparing actual work done with the standard amount of work for this job determined a “normal.” The ratio of a standard performance time to an actual performance time is usually expressed as a percentage.

EFFORT. Physical and mental exertion/energy required to perform a given job or task. A criterion or job factor of a job evaluation plan.

EFFORT RATING. Evaluated worker performance. In work measurement, an estimate of observed performance, normally expressed as a percentage of “normal” performance. (See LEVELING, NORMALIZE.)

ELEMENT. A basic segment of a job or task identified by a distinct start/stop breakpoint, e.g., grasp, or release.

ELEMENT TIME. Time allowed to perform a specified part of a job or task at normal effort.

ELISA TEST. The most commonly used and the least expensive test to determine whether an individual is infected by HIV, a precursor of AIDS.

EMERGENCY BOARD. A board appointed by the United States President, whenever a labor dispute threatens to seriously interrupt interstate commerce, to investigate and report on the conditions underlying the dispute within a specified time period. After the board reports, no change may be made in the conditions underlying the dispute, except by agreement of the parties. This is the last formal step in the procedures regarding contract disputes.

EMPLOYEE. General term for an employed wage earner or salaried worker.

EMPLOYEE ASSISTANCE PROGRAMS (EAP). Programs specifically designed to assist employees with chronic personal problems (for example: marital dysfunctions, alcohol or drug abuse) that hinder their job performance, attendance, and corporate citizenship.

EMPLOYEE BENEFITS. Provisions made available to an employee by an employer, e.g. health insurance, vacations, holidays, schooling allowance, etc. Such benefits may be paid totally by the employer or the costs may be shared.

EMPLOYEE BUY-OUT. A program whereby employees of a company band together to buy the company from the owners (stockholders) and then operate it as the new owners.

EMPLOYEE CLASSIFICATION. A designation given to an employee based upon some selected basis for differentiation such as pay grade, skill or trade, length of employment, membership of a work unit, etc.

EMPLOYEE CONTRIBUTIONS. Any contributions to a benefit plan made by employees.

EMPLOYEE INVOLVEMENT PROGRAMS. Programs set up by an employer, frequently in cooperation with a union, to allow employees to be involved in the management of various operations or jobs.

EMPLOYEE PACING. Condition in which the pace or rate at which the employee works is determined by the employee and not the machine as under machine pacing.

EMPLOYEE POLYGRAPH PROTECTION ACT (1988). Prohibits most employers from polygraph testing without reasonable suspicion.

EMPLOYEE SERVICES. A wide range of employer provisions at no cost to the employee or made available at discounted or token prices.

EMPLOYEE SERVICES AND PERQUISITES. A form of indirect compensation that varies depending on employee type and organization to offset the pressures associated with working (for example, day care) or used to symbolize a status differential eg. Company paid memberships to country, athletic, and social clubs.

EMPLOYEE STOCK OWNERSHIP PLAN (ESOP) (LEVERAGE ESOP). A plan in which a company borrows money from a financial institution using its stock as security or collateral for the loan. Principal and interest loan repayments are tax deductible. With each loan repayment, the lending institution releases a certain amount of stock being held as security. The stock is then placed into an Employee Stock Ownership Trust (ESOT) for distribution at no cost to all employees. The employees receive the stock upon retirement or separation from the company.

EMPLOYER. General term for any individual, government agency,  corporation, or other operating group, which hires workers (employees). The terms “employer” and “management” are often used interchangeably when there is no intent to draw a distinction between owners and managers.

EMPLOYERS’ ASSOCIATION. Voluntary membership organization of employers established to deal with issues common to the group. It may be formed specially to handle industrial relations and to negotiate with a union or unions. (See ASSOCIATION AGREEMENT.)

EMPLOYMENT CONTRACT. A legal agreement concerning period of employment, earnings, conditions of employment and duties of the employee and the employer.

EMPLOYMENT DIRECTOR (MANAGER). A specialist who recruits, investigates, selects, and recommends the hiring of personnel to meet the requirements of the firm or agency.


ENTRANCE RATE. The hourly rate a worker receives upon being hired.

ENTRY LEVEL. Basic or lowest job in a line of progression in which employees entering that line of progression first accumulate seniority rights.

ENTRY RATE. Compensation initially paid new or transferred employees during a probationary or  training period.

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION (EEOC). A commission of the Federal Government charged with enforcing the provisions of the Civil Rights Act of 1964. In addition the commission is charged with enforcing the provisions of the Equal Pay Act of 1963 as it pertains to sex discrimination in pay.

EQUAL PAY ACT OF 1963. An amendment to the Fair Labor Standards Act of 1938, prohibiting pay differentials on jobs that are essentially equal in terms of skill, effort, responsibility, and working conditions, except when they are the result of bonafide seniority, merit or production-based pay systems or other-job related factor other than gender.

EQUAL PAY FOR COMPARABLE WORK. This doctrine is much broader than the equal pay doctrine. In effect this doctrine moves beyond the four compensable factors embodied in the Equal Pay Act of 1963 and specifies that so long as the work performed by women and men in question is comparable, charges of sex discrimination in pay can be brought under Title VII of the 1964 Civil Rights Act. The U.S. Supreme Court in Gunther vs. County of Washington allowed plaintiffs to bring suit on sex discrimination in pay outside the narrow confines of equal work and under the broader confines of equal pay for comparable work. This principle exists midway between the extremes of the equal pay for equal work doctrine and the comparable worth doctrine. (See EQUAL PAY FOR EQUAL WORK.)

EQUAL PAY FOR EQUAL WORK. The doctrine embodied in the Equal Pay Act of 1963, intended to protect women from sex discrimination in pay. The Equal Pay for Equal Work doctrine says that women may not be paid less than men on jobs that are equal in terms of four compensable factors: equal effort, equal skill, equal responsibility, and equal working conditions. The Equal Pay for Equal Work doctrine is a very narrow definition of pay equity across the sexes.

EQUITY. Anything of value earned through the provision or investment of something of value. In the case of compensation, an employee earns equity interest through the provision of labor on a job. So defined, equity is often used as a fairness criterion in compensation: People should be paid according to their contributions. Also, one of the four basic principles in productivity gainsharing plans. For banking and accounting, equity means the capital accruing to ownership that results after the subtractions of liabilities from assets.

EQUITY FUNDING. The funding of a portion of a retirement plan investment in equity. Equity funding affects the employer’s contributions but not the employees’ benefits.

EQUIVALENT WORKERS. A method used to calculate the total number of employees that would be required if all operators worked 40 hours a week for 52 weeks a year. The total actual hours worked divided by the product of 40 hours times 52 weeks a year.

ERISA. The Employee Retirement Income Security Act, passed by Congress in 1974, legislated the manner for administering pensions, pension plans, and other service-related benefits. Compliance of ERISA legislation is the responsibility of the Department of Labor, while the administration of taxation on benefits is the responsibility of the Internal Revenue Service.

ERTA. The Economic Recovery Act of 1981 enabled employees to establish Individual Retirement Accounts. The 1981 Act also accelerated tax deductions for individuals and businesses on the depreciation of real property and tangible personal property. The rules for these tax shelters were amended successively by the Tax Reform Act of 1986, the Omnibus Budget Reconciliation Act of 1989 and the Unemployment Compensation Amendments of 1992.

ESCALATOR CLAUSE. A provision in a union agreement allowing for the adjustment of wages in accordance with specific changes in the cost of living as measured by an appropriate index, the price of production materials or some other agreed-upon criterion. (See COST OF LIVING ADJUSTMENT.)

ESCAPE CLAUSE. General term signifying release from an obligation. One example is found in maintenance- of-membership arrangements which give union members an “escape-period” during which they may resign from membership in the union without forfeiting their jobs.


EVALUATED RATE. The base pay for a job determined by an analytical procedure for comparing jobs and setting rates of pay.

EVALUCOMP. A job evaluation plan for office personnel, technicians, professional and scientific personnel, and all levels of management. Developed and offered by the American Management Association, Evalucomp differs from traditional job evaluation systems in that no effort is made to construct an internal hierarchy of jobs on the basis of job characteristics. Rather an extensive description of each job is provided to allow for matching along with Evalucomp wage survey data.

EXCLUSIVE BARGAINING RIGHTS. The right and obligation of a union designated as majority representative to bargain collectively for all employees, including nonmembers, in the bargaining unit.

EXECUTIVE BOARD. Constitutional administrative body composed of elected officials and other elected or appointed members generally responsible for overseeing operations and establishing operating policies.

EXECUTIVE COMPENSATION. Money and fringe benefits paid to an executive for services performed. Executive compensation may include money, deferred financial payment, car, club membership, stock options and other perquisites.

EXECUTIVE COMPENSATION PLAN. Any of a number of special pay arrangements to motivate and reward key management employees. Includes incentive bonuses, stock plans, insurance deferred compensation, and perquisites.

EXEMPT EMPLOYEE/JOB. Any employee or job excluded from the Wage and Hour Law. Includes executive, administrative, professional, or outside salespersons who meet certain criteria covering earnings, direction of work force, exercise of discretion and independent judgment, advanced knowledge in a field of science or learning, or selling outside the employer’s place of business.

EXEMPT JOB. A job not subject to the provisions of the Fair Labor Standards Act with respect to minimum wage and overtime. Exempt employees include most professionals, administrators, executives, and outside sales representatives.

EXPECTED EARNINGS (LEVEL). Under an incentive plan, the level at which employees are targeted to earn. Incentive plans are designed to allow a properly skilled operator working with the necessary effort to earn 125% or 133% (or some other value) above the base rate. This target level is the expected earnings rate or level.

EXPENSE ACCOUNT. An account of reimbursable expenses paid or incurred by an employee in connection with the performance of services such as transportation, meals, and lodging while away from home.


EXPERIENCED EMPLOYEE. A worker who has satisfactorily performed a job or task for a lengthy period of time.

EXPERIENCE RATING. (1) Process of basing tax rates or insurance premiums on the employer’s own record; as in worker’s compensation, unemployment insurance, and commercially insured health and insurance programs. (2)The process of classifying individuals according to previous experience and/or qualifications.

EXPERT WITNESS. A person with special skills or experience in a profession or technical area who testifies in a legal proceeding.

EXPIRATION DATE. Formal termination date established in a collective bargaining agreement.

EXTENDED LEAVE PLAN. A plan allowing workers to take extended, unpaid leave without loss of job or seniority for specific reasons.

EXTENDED VACATION PLAN. A plan providing extra-long paid vacations to qualified (long service) workers at regular intervals supplementing an annual paid vacation plan.

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