Employment law or labor law concerns the legal relationship between employers and employees, which arise out of an employment contract. Labor law regulates the entire relationship between employer and employee including the initial hiring process, job duties, wages, promotions, benefits, employment reviews, and termination of the employment relationship. It also includes litigation on the basis of unfair labor practices and discrimination.

In order to distinguish employees from independent contractors, the courts will usually look to the relationship and determine whether the employer had the right to control how the employee performed the job. If that is unclear, the court may look to the nature of the relationship between the employee and the employer. If the employee is substantially economically dependent upon the employer, the court may determine that an employee-employer relationship exists.

The Fair Labor Standards Act (FLSA) provides for the employment of certain individuals at wage rates below the minimum wage. These individuals include student-learners (vocational education students), as well as full-time students employed by retail or service establishments, agriculture, or institutions of higher education. Also included are individuals, whose earning or productive capacity is impaired by a physical or mental disability, including those related to age or injury, for the work to be performed. Employment at less than the minimum wage is designed to prevent the loss of employment opportunities for these individuals. Certificates issued by the U.S. Department of Labor (DOL) Employment Standards Administration's Wage and Hour Division are required for this type of employment.

All employees are entitled to basic rights in the workplace including the right to privacy, fair compensation, and freedom from discrimination. The other rights of employees include right to be free from discrimination and harassment, right to fair wages, right to a safe workplace free of dangerous conditions, toxic substances, and other potential safety hazards, right to be free from retaliation for filing a claim or complaint against an employer or, in other words, “whistleblower” rights.

The right to privacy applies to the employee's personal possessions, including handbags or briefcases, storage lockers accessible only by the employee, telephone conversations or voicemail messages and private mail addressed only to employee. The employees have very limited rights to privacy in their e-mail messages and Internet usage while using the employer's computer system.

If an employee has been fired without a good reason or in violation of federal or state law, it could be a wrongful discharge, which can be challenged. If the employee can bring a successful claim for wrongful discharge, employers can be made to pay back wages, fines, and possible punitive damages, or the employee may be reinstated. However, if the employee is an “at-will" employee, there is little chance for the employee to succeed since the employer has the right to fire him/her for any or no reason at any time so as long as all protections afforded by state and federal law have been followed. Where no wrong has been committed, "at-will" employees have no remedy for employment termination.

Severance pay is often granted to employees upon termination of employment. It is usually based on length of employment for which an employee is eligible upon termination. There is no requirement in the Fair Labor Standards Act (FLSA) for severance pay. Severance pay is a matter of agreement between an employer and an employee (or the employee's representative).

The Fair Labor Standards Act (FLSA) requires payment of at least the minimum wage for all hours worked in a workweek and time and one-half an employee's regular rate for time worked over 40 hours in a workweek. There is no requirement in the FLSA for severance pay.

Unless there is a contract guaranteeing severance pay, the employer is under no obligation to give the leaving employee severance pay on termination.

The FLSA requires overtime pay at a rate of not less than one and one-half times an employee's regular rate of pay after 40 hours of work in a workweek for covered, nonexempt employees. Some exceptions to the 40 hours per week standard apply under special circumstances to police officers and fire fighters employed by public agencies and to employees of hospitals and nursing homes. Some states have also enacted overtime laws. Where an employee is subject to both the state and Federal overtime laws, the employee is entitled to overtime according to the standard that will provide the higher rate of pay. Effective August 23, 2004, U.S. Department of Labor regulations state that all employees who earn less than $455 per week, or $23,660 per year, are automatically entitled to receive overtime pay.

Employees who earn more than $455 per week, or $23,660 per year, are exempt from overtime requirements if they are compensated on a salary, and not on an hourly basis, and if their job falls into one of the following three categories: executive, learned, or creative professional. An employee falls into executive category if his/her primary duties are directly related to management and involves the exercise of discretion and independent judgment. If the employee is a learned professional with advanced knowledge in a field of science or learning or a creative professional in which the primary duties involves invention, imagination, originality, or talent in a field of creative or artistic endeavor, he/ she is exempted from overtime pay.

The Occupational Safety and Health (OSH) Act of 1970 created the Occupational Safety and Health Administration (OSHA) within the Department of Labor, in order to reduce workplace hazards and implement safety and health programs. Under OSHA, the employer is required to provide work and a workplace free from recognized hazards, inform the employees of the potential hazards, and establish a written, comprehensive hazard communication program that includes provisions for such things as container labeling, material safety data sheets, and an employee training program. In addition to this, the employer should inform employees of the existence, location, and availability of their medical and exposure records when employees first begin employment and to provide these records upon request.

Collective bargaining is the process of negotiations between an employer and a group of employees to decide on certain conditions and terms of employment. The result of those efforts is called a “collective bargaining agreement” or CBA. This agreement serves as the starting place for resolution of disputes between an employer and its employees. Collective bargaining and union organization are governed by a federal law known as the National Labor Relations Act (NLRA).

The union will negotiate with the employer on issues concerning the general welfare of the employees such as wage and salary negotiations, benefits like health care insurance and paid time off, general on-the-job working conditions, and health and safety standards in the workplace.

The NLRA specifically excludes agricultural workers, workers employed in domestic services in a home, or those employed by a parent or spouse, independent contractors, supervisors and those persons employed subject to the Railway Labor Act, state, local or federal government or by any person who is not defined as an employer under the NLRA.

A majority of the states have passed laws that give workers the right to hold a job without joining a union or paying union dues. The union must still represent all employees within its bargaining unit, regardless of whether the employee is a paying member.

As per the prevailing civil service laws, a public sector employee generally cannot be fired for his/her political beliefs, membership in particular clubs, associations, or unions or for speaking in public on any issue, writing a letter to a newspaper, or similar action. Above all, a public sector employee is usually protected by “due process”. An employer must give an employee notice of the reason for being discharged and the opportunity of a hearing to contest the discharge with a decision rendered by an impartial third-party decision maker.

Generally, an employee cannot take away his/ her retirement benefits unless vested. Once the employee has become vested, no one can deprive him/her of the portion of retirement money that is vested. If the employee is only partly vested, he/she might lose the portion of retirement that is not vested

There are both state and federal laws which regulate the employment of children. Most children under the age of fourteen may not be employed. (However, there are certain exceptions, such as newspaper delivery). A child under the age of sixteen may not be hired to perform hazardous work.

Unemployment Insurance (UI) is designed to provide workers who have been laid off a weekly income during short periods of unemployment. The system is run and funded by state and federal taxes paid by employers.

If the employer alters the job stipulations according to his own whims and caprice to the detriment of the employee, making it intolerable to the latter, it would amount to constructive termination. Instances like reducing the wages by half, or switching the day hours to the moonlight shifts, or demoting the employee to an abysmal position with out any concrete reason, would obviously be a constructive termination.