Labor Force

HR Glossary for HR Professionals

Glossary of the most common HR terms and acronyms to assist professionals navigating the ever-growing and ever-changing world of HR terminology.

Labor Force

What is the Labor Force?

In short, the labor force includes all people at the age 16 or older, who are classified as either employed or unemployed.

Employed: 

People age 16 or older are classified as Employed if they meet any of the following criteria:

  • Work at least 1 hour as an employee and receive pay.
  • Work at least 1 hour in their own business, trade, farm, etc., otherwise known as someone who is self-employed.
  • Was temporarily absent from their job, whether of whether not they earn pay for the time off.
  • Without pay for a minimum of 15 hours in a company that a family member owns.

Unemployed: 

A person age 16 or older are considered unemployed if they meet the following criteria:

  • Volunteering.
  • Participating in internships without pay.
  • Attending trainings without pay.
  • Participate in trainings not sponsored by an employer.
  • National Guard or Reserve Duty– more specifically, weekend or summer training.
  • Ownership in a business or far for investment purposes, with no participation in operations or management.
  • Jury Duty.
  • Work around one’s home, for example, cleaning, painting, repair work, etc.

What is the Labor Force Participation Rate?

The labor force participation rate includes the number of people in the labor force, as a percentage of the total population. In other words, the participation rate is the percertage of the population that is working or actively searching for a job.

You can use the following equation to calculate the labor force participation rate:

(Labor Force / Population) X 100

Active Job Search Method:

We can define active job searching methods as the potential of the result of a job offer, for example:

  • Contacting an employer.
  • Having a job interview.
  • Submitting a resume and/or application.
  • Using an employment agency.
  • Contacting a job recruiter.
  • Placing job advertisements.

Unemployment Rate:

Unemployment rate represents the number of individuals who are not working as a percentage of the labor force.

You can calculate the rate using the following equation:

(Unemployment / Labor Force) X 100

Related Terms: Floating Holidays

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