Back pay may also be referred to as back wages, or retro pay. The term itself refers to an amount of wages that an employee should have been paid, but did not receive. Another way of putting it is that back pay or wages are wages that are owed to an employee by their employer, because those wages were never paid out.

Generally speaking, this pay would be any ordinary wages that the employee was entitled to receive according to their salary, or their hourly wage amount.

There are many circumstances in which the payment of back pay may be necessary. Back pay could be the fault of either the employee or the employer, or sometimes both at once. Additionally, the need for back pay may be either intentional or an honest mistake.

Some common examples of situations which would necessitate back pay include:

  • Calculation mistakes on the part of the employer’s human resources department;
  • Issues associated with employee wage garnishment;
  • Missed payments associated with the employment being terminated, or leaving the company;
  • Disputes between the employer and the employee in terms of overtime pay rates and logged working hours;
  • Disputes between the employer and the employee in terms of paid leave, or vacation pay; and
  • Pay increases that are applied after the fact.

Who Is Entitled to Receive Back Pay?

One of the most common disputes associated with back pay involves who is actually entitled to receive such payments. Generally speaking, both hourly and salaried employees may be entitled to receive back pay when they are owed. They are entitled to back pay whenever they lose wages and benefits as a result of wrongful employment practices.

Most back pay awards are because of wrongful termination, either due to a hostile work environment or because of harassment. Some of the most common examples of wrongful employment practices include:

  • Terminating an employee because of employment discrimination;
  • Denying promotions which were explicitly promised;
  • Withholding qualified overtime pay; and
  • Withholding wages to stop an employee from reporting misconduct or for reporting previous misconduct.

Employees may also be entitled to back pay when an employer retroactively increases wages and benefits.

In cases in which the employer disputes the number of hours an employee worked, or how much they should be paid, it will be considerably difficult to determine if the employee is actually entitled to back wages. It will also be difficult to determine exactly what methods to use for calculating said wages.

An example of this would be overtime. While time and a half is generally accepted in most states, this is not always the case. Additionally, there may be outside agreements involved that will influence if back pay is owed, and how to calculate exactly how much back pay is owed.

To expand on this example, suppose that you were instructed to work ten hours of overtime. Your boss verbally confirmed that you would be paid double your normal hourly rate, whatever that hourly rate may be. You then worked twelve overtime hours, but those hours were not properly recorded, or maybe they were not recorded at all. Your check only reflects ten hours of overtime, and at the rate of time and a half.

It is likely that there would then be a dispute regarding overtime and back pays. The following facts would most likely need to be considered in any legal proceedings in order to determine whether any back pay is appropriate:

  • Because the overtime hours were not logged, there is no way to actually prove whether you worked ten or twelve overtime hours;
  • The agreement for double time pay was not put into writing, and it is up to your boss to be honest about what they offered to you;
  • Whether your state has a standard time and a half overtime pay rate, or something else; and
  • Whether there is any history of overtime pay handled in the similar manner, and whether the full amount was disbursed in those past instances.

It is important to note that in addition to back wages, an employee may actually be entitled to other amounts. An example of this would be if your case is based on wrongful termination, or discrimination. If it is also dealing with back pay issues, other damages may be available in addition to the back pay amount. Examples of other potential damages include economic, compensatory, or punitive.

How Can Back Pay Be Recovered?

There are many different ways in which back pay may be recovered. An example of this would be if an employee is entitled to a promotion, specifically in terms of an increase in salary. However, the employee does not receive that pay raise for one month. In this example, the employee would receive the back pay they are entitled to in the subsequent paycheck.

A court may find that a company engaged in wage violations. Under these circumstances, the court will issue an order which requires the company to provide the affected employees with all owed back pay. The Wage and Hour Division (“WHD”) of the Department of Labor may also be involved, in order to ensure that the back pay is actually awarded. The WHD is a federal office, and the majority of the cases addressed by the WHD involve issues associated with wage and hour disputes.

Back pay as an award can be ordered under the FLSA, or Fair Labor Standards Act, under different federal contract labor statutes. The following methods are generally how the FLSA provides for recovering unpaid minimum and/or overtime wages:

  • As previously mentioned, the Wage and Hour Division may supervise the payment of back pay;
  • The Secretary of Labor may bring a lawsuit against the employer for back wages, in addition to an equal amount as liquidated damages;
  • The affected employee may file a private lawsuit for back pay, as well as an equal amount in liquidated damages, in addition to attorney’s fees and court costs; or
  • The Secretary of Labor may request an injunction in order to restrain a party from violating the FLSA. This could include the unlawful withholding of proper minimum wage and overtime pay.

According to the FLSA, employees are entitled to receive at least the minimum wage in back pay. What this means is that they may receive no less than the federally mandated minimum wage per hour of work that has necessitated back pay. If the employee has been wrongfully denied overtime pay, they are generally entitled to receive the standard overtime pay rates.

Generally speaking, an employee cannot bring a private lawsuit if they have been paid back wages under the authority of the Wage and Hour Division. Additionally, if the Secretary of Labor has previously filed suit in order to recover the wages, the affected employee usually cannot file their own lawsuit. It is important to note that there is a two year statute of limitations to the recovery of back pay.

However, if the case involves intentional violations, there is a three year statute of limitations. According to the Davis-Bacon Act, back wages should also be made available for underpayments to employees.

Do I Need an Attorney For Issues With Back Pay?

Refusing to pay necessitated back pay is considered to be a wrongful employment practice. If you are experiencing issues related to back pay, you should consult with an experienced and local employment lawyer. Because many laws associated with back pay vary from state to state, working with a local attorney is advised so that you receive the most relevant legal advice.

An experienced and local employment attorney can help determine whether you are owed back pay, and if so, how best to pursue that payment. Finally, an attorney will also be able to represent you in court, as needed, while protecting your legal rights as a worker.