What is Employment?

Definition: Employment is an agreement between an individual and another entity that stipulates the responsibilities, payment terms and arrangement, rules of the workplace, and is recognized by the government.

What Does Employment Mean?

What is the definition of employment? In laymen’s terms, employment refers to the idea that an individual has entered some form of verbal or written commitment with an entity, known as the employer, under certain stipulations such as payment, schedule, etc. Employment is distinctly different from contract work and, as such, is filed in separate manner with the U.S. government.

Organizations use employment daily to fuel their businesses, expand, and increase output. Employment requires that the individual be a legal citizen of the United States or possess a verified work permit. The Internal Revenue Service (IRS) is in charge of tracking employment for both the individuals and the entities that employ them.

From a business standpoint, employment is of particular interest to the IRS because they collect a payroll tax and often hold employers responsible for making the appropriate deductions from their employee’s paychecks. There are also certain laws, workplace standards, and hiring procedures that each employer must abide by. Therefore, businesses are typically very thorough in their hiring process because failure to do so could result in sizeable penalties from the IRS, the United States government or both.


Jonathan’s Shipyard is looking to hire a new batch of employees. The organization proceeds to rent out an ad in the local newspaper to spread awareness about open job positions. They filter the remaining candidates, so that only the ones most suitable for the position remain. Once Jonathan’s Shipyard has completed the interview process, they make job offers to the finalists. They each accept the offer. However, in order for their employment to be official Jonathan’s Shipyard must follow the proper procedures.

They verify each candidate’s residency as an American citizen, collect two forms of identification, and have the candidates fill out the corresponding tax forms for IRS and financial reporting purposes. Once the finalists have completed these steps, the employer has the candidates sign a formal agreement that states both parties acknowledge and accept the terms and conditions of the employment. Jonathan’s Shipyard also acknowledges that if any of the terms in the agreement do not adhere with United States’ employment law then they may be subject to civil injunction, fines, and even criminal charges.

Summary Definition

Define Employment: Employment means the act of being hired or employed by a company or employer.