Acronyms and initialisms are first letter abbreviations that promise to save time and improve the efficiency of spoken and written language, and it’s true, they do just that when everyone is on the same page. There’s no need to say the North Atlantic Treaty Organization when everyone understands NATO. Why pronounce the Federal Bureau of Investigation when you can just say the FBI? But acronyms can also come across as exclusionary, like a secret language or code that closes a community to outsiders.
Decoding the Secret Language of HR
At Propel HR we want to simplify your life, not confuse you, but in the complex world of Human Resources (HR) quite a few letters get thrown around. So we’ve compiled a list of some of the acronyms and initialisms that you might encounter when talking about Human Resources:
PEO: Professional Employer Organization
In a PEO or co-employment agreement, the Professional Employer Organization becomes the co-employer of your company’s workforce. As the business owner, you still manage your employees day-to-day and maintain control of business operations. The PEO provides human resource services and assumes partial liability for the employees. The PEO arrangement is a comprehensive HR and payroll solution that offers additional protection for your company.
ASO: Administrative Service Outsourcing
In an ASO arrangement, your company can choose which HR and payroll services work best for you. You can choose the full-service ASO or take advantage of individual HR solutions. Also known as HRO (Human Resources Outsourcing).
ACA: The Affordable Care Act
Also known as Obamacare. ACA is a shortened initialism for PPACA (Patient Protection and Affordable Care Act).
The ACA put in place comprehensive health insurance reforms and the “Patient’s Bill of Rights,” which gives Americans the stability and flexibility they need to make informed choices about their health. President Barack Obama signed the ACA into law on March 23, 2010. The Supreme Court rendered a final decision to uphold the health care law on June 28, 2012.
ALE: Applicable Large Employer
Employers that had 50 full-time employees or more last year (including full-time equivalent employees) are most likely designated as an ALE for the current year.
ALEs are subject to the Employer Mandate Requirement. Employers must determine their ALE status each calendar year based on the average size of their workforce during the prior year.
COBRA: Consolidated Omnibus Budget Reconciliation Act of 1985
COBRA gives workers and their families the right to choose to continue group health benefits for limited periods of time if they lose their benefits because of job loss, reduction in hours worked, transition between jobs, death, divorce, and other life events. President Ronald Reagan signed COBRA into law on April 7, 1986.
DOL: Department of Labor
The Department of Labor administers federal labor laws to guarantee workers' rights to fair, safe, and healthy working conditions. These laws include minimum wage and overtime pay, unemployment insurance, and protection against employment discrimination.
EEOC: U.S. Equal Employment Opportunity Commission
The EEOC is an independent federal agency. They are responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of race, color, religion, sex (including pregnancy, sexual orientation, and gender identity), national origin, age (40 or older), disability, or genetic information.
EIN: Employer Identification Number
An EIN is used by the IRS to identify a business entity. Also known as a Federal Tax Identification Number. Sometimes referred to as FEIN (Federal Employer Identification Number).
EPA: The Equal Pay Act of 1963
The Equal Pay Act of 1963 is a United States labor law aimed at abolishing wage disparity based on the sex of the employee. The EPA amended the Fair Labor Standards Act and was signed into law on June 10, 1963, by John F. Kennedy.
FLSA: Fair Labor Standards Act of 1938
The FLSA establishes minimum wage, overtime pay, record keeping, and youth employment standards. Covered nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour effective July 24, 2009. After 40 hours of work in one week, the employee is entitled to receive overtime pay at a rate not less than 1.5 times the regular rate of pay. President Franklin D. Roosevelt signed the FSLA into law on June 25, 1938. Changes to the overtime exemption rules will be effective on December 1, 2016
Our free webinar details a 6-step action plan to help you prepare for the FLSA Final Rule.
RELATED READING: FLSA Exemption Changes Require These 2 Essential Elements
FMLA: Family and Medical Leave Act of 1993
The Family and Medical Leave Act of 1993 (FMLA) is a United States federal law requiring covered employers to provide employees job-protected and unpaid leave for qualified medical and family reasons. President Bill Clinton signed the FMLA into law on February 5, 1993.
FTE Count: Full-Time Equivalent Count for the Employer Mandate of the Affordable Care Act
A full-time equivalent employee is a summation of part-time employees that are equal to one full-time employee. Full-time employees are defined as working an average of 30 hours per week or 130 hours per calendar month. The FTE count is calculated by adding up the hours worked by part-time employees during the month and dividing by 120. The total is added to the number of full-time employees to determine if an employer is an Applicable Large Employer (ALE).
RELATED READING: ACA Compliance - How to Determine If You're an Applicable Large Employer (ALE)
HCM: Human Capital Management
HCM is a set of practices related to employee staffing that considers people as human capital—assets whose current value can be measured and whose future value can be enhanced through investment.
The term “HCM system” has become an umbrella term for integrated software designed for employee records and human capital management processes. Also known as an HRIS or an HRMS.
HIPAA: Health Insurance Portability and Accountability Act of 1996
Also known as the Kassebaum–Kennedy Act or the Kennedy–Kassebaum Act.
The HIPAA protects health insurance coverage for workers and their families when they change or lose jobs and requires the establishment of national standards for electronic health care transactions and national identifiers for providers, health insurance plans, and employers. Bill Clinton signed the HIPAA into law on August 21, 1996.
HRIS: Human Resources Information System
Also known as an HRMS or an HCM system.
An HRIS is an intersection of human resources and information technology. An HRIS allows HR activities and processes, such as accounting, time and labor management, and payroll to occur electronically and helps a company plan and manage its HR costs more effectively.
HRM: Human Resource Management
Strategic HRM is the practice of identifying a company’s current and future HR needs and then attracting, developing, rewarding, and retaining employees for the benefit of both the employees and the business. HR departments that practice strategic HRM interact with other departments within the business to create strategies that align with the other departments’ objectives, as well as those of the entire organization.
HRMS: Human Resource Management System
Also known as an HRIS or an HCM system.
An HRMS is a software program or suite of programs for managing business processes related to human capital management (HCM).
HRO: Human Resources Outsourcing.
HRO is another term for ASO (Administrative Service Outsourcing).
MEP 401(k): Multiple Employer Plan 401(k)
An MEP is a retirement plan adopted by two or more employers who are unrelated for income tax purposes. One type of MEP is sponsored by a PEO and is adopted by the PEO’s clients.
OSHA: Occupational Safety and Health Administration
OSHA is an agency under the U.S. Department of Labor, which was created when President Richard Nixon signed the Occupational Safety and Health Act of 1970 into law on December 29, 1970. OSHA's mission is “to assure safe and healthful working conditions for working men and women by setting and enforcing standards and by providing training, outreach, education, and assistance." Learn more at: https://www.osha.gov
PPACA: Patient Protection and Affordable Care Act
The Patient Protection and Affordable Care Act is the full name of the Affordable Care Act (ACA). Also known as Obamacare.
SHRM: The Society for Human Resource Management
“The Society for Human Resource Management (SHRM) is the world’s largest HR professional society, representing 285,000 members in more than 165 countries.” Learn more at: https://www.shrm.org
SHRM Certified Professional
SHRM Senior Certified Professional
TIN: Tax Identification Number
A TIN is an identification number used by the Internal Revenue Service in the administration of tax laws.
TLM: Time and Labor Management
TLM is the process of tracking, managing and allocating hours worked by employees. TLM can also be a module in a more robust HRIS software package.
Acronyms, which are pronounced like words (i.e. NASA, OSHA, and COBRA) and initialisms, which are pronounced by sounding out the letters (i.e. FBI, PEO, and ACA) can be confusing and frustrating, but with a little practice, you’ll be talking like an HR professional soon.
If you have any questions when navigating the abbreviations and complications of payroll and human resources, please call one of Propel HR’s Human Resource Experts at 800-446-6567 or email us at email@example.com.