What is adverse action?

Answer from Kyle, PHR:

An adverse action is any action an employer takes that negatively affects an employee. These include discipline, termination, demotion, reduced pay, and reduced hours. In certain circumstances, a transfer or change in job duties could also be an adverse action. Adverse actions are often warranted. Employees, after all, should face negative consequences for poor performance or misconduct. But there is a risk whenever you take adverse action. The employee could claim that the action was taken for a discriminatory or other illegal reason. The risk is greater if the employee has recently engaged in any kind of protected activity such as taking leave or filing a complaint with a state agency. You can minimize the risk of taking adverse action by clearly documenting the reason for it and by being respectful of the affected employee. If you have a good reason for the adverse action, and the affected employee understands this reason and knows you can provide evidence for it, they’re much less likely to try to bring a claim against you. There’s also a better chance that the adverse action will end up being a net positive for the employee, i.e., they’ll get their act together and be successful.