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Terms and Definitions

What is an employee?

Updated: May 21, 2024

Employee definition and meaning

An employee is any person who performs work for a person or entity that has the right to direct the details of how the work is performed. For example, an employee typically has a set schedule and specific job duties that are put in place by their employer, and the methods, location, and timeframe in which work is performed are usually determined and controlled by the employer.

 

Beyond assigned responsibilities, employees can receive specific job training, have expenses reimbursed from time to time, and may receive certain benefits such as paid time off. Another type of worker — independent contractors — are similar to employees, but they often exercise a greater degree of discretion in their roles.

 

More about employees

Employees can be exempt or nonexempt from overtime pay. They can be paid by the hour, day, or by salary. Government agencies like the IRS and the U.S. Labor Department all have their own specific regulations and requirements for qualifying a worker as an employee. Most employers will use payroll software to ensure employees are paid correctly and tax withholdings are accounted for because it automates deductions and reduces the need for manual number crunching.

 

While an employer usually has more direct authority over employees, there also tend to be more obligations. For example, employers are responsible for withholding and paying payroll taxes on behalf of employees, but independent contractors are responsible for their own taxes.

Using employee in a sentence

“My home business just hit a milestone of hiring our first employee!”

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