Back wages are wages that are owed to an employee by their employer because they were never paid out. These would be the ordinary wages the employee was supposed to receive per their salary or hourly wage amount. Back wages are sometimes called retro pay or back pay, depending on the jurisdiction you live in.
Back wages can occur for several different reasons and many factors will need to be evaluated. Back wages could be the fault of the employer or an employee, or a combination of both. This occurrence may be intentional or an honest mistake. Some common examples include the following:
- Mistakes in calculations by the employer’s human resources office;
- Issues related to an employee’s wage garnishment
- Unpaid wages in connection with an employee’s termination or separation from the company;
- Disputes between the employer and employee about overtime rates and hours logged;
- Conflicts between the employer and employee involving leave or vacation pay; and
- Pay increases that are applied retroactively.
As one could imagine, there are several disputes that could result from a claim of back wages. This includes whether the employee is subject to back wages, how much they can receive, and whether any restrictions apply. If a dispute ensues, then an employee may have a legal claim for back wages that is appropriate to address in court.
Am I Entitled to Recover Back Wages and How are Back Wages Calculated?
In cases involving a simple clerical error, the amount of back wages can be easily calculated according to the employee’s standard pay rates. In these instances, remediation can be handled internally and is generally quick and easy.
For simple back wage disputes like this, it will be easy to determine what is owed based on the difference between normal pay and what was incorrectly paid out. However, the employee may still need to cooperate with the company’s human resources department in order to obtain pay stubs and other documents to help calculate the amount of back wages owed.
The other situations discussed above is where it gets tricky. If the employer disputes the number of hours an employee worked or how much they should be paid (like with overtime), it will be harder to determine if you are entitled to back wages and what methods to use for calculations.
In regards to overtime, while time and a half is common in most states, this is not always the case and sometimes there are outside agreements at play. All of this will be taken under advisement by the Department of Labor and/or court system on a case-by-case basis.
As an example, say you were directed to work ten hours of overtime. Your boss verbally told you that you would be paid double your normal hourly rate. You worked twelve overtime hours but they were not recorded.
Your check only reflects ten hours at the rate of time and a half. This would be an example of a dispute over back wages. The following facts would likely need to be taken up in legal proceedings to determine whether any back pay is appropriate:
- The overtime hours were not logged, so there is no way to prove whether you worked ten or twelve hours;
- The agreement for double time pay was not put into writing;
- Whether your state has a standard time and a half overtime pay rate; and
- Any history of overtime pay is handled in the similar manner, and whether the full amount was received in those instances.
Keep in mind that in addition to back wages, the employee may actually be entitled to other amounts. If your case is based on wrongful termination or discrimination but also dealing with back pay issues, then other damages may be available.
If a back wage dispute makes it to court under a wrongful termination or discrimination claim, then the back wages will likely only be a portion of the verdict award. Other potential damages include economic, compensatory, or punitive.
Can I Take My Claim for Back Wages to Court and Are There Any Restrictions on Back Wage Lawsuits?
If there is a dispute, you may be able to take your case to court under the Fair Labor Standards Act (FLSA). Under the FLSA, you can receive back pay the following ways if you meet the eligibility requirements:
- Under the supervision of the Department of Labor’s Wage and Hour Division;
- Via a lawsuit brought by the Secretary of Labor;
- From an injunction filed by the Secretary of Labor regarding FLSA violations, which can restrain an employer from unlawfully withholding minimum wage and overtime pay owed to an employee; or
- Via a private lawsuit, only if the above options have not occurred.
There will usually be a two-year statute of limitations to recover back wages. This is extended one additional year if the employer acted willfully in withholding wages. Most states usually follow the FLSA guidelines.
Keep in mind that in some cases, there may be restrictions on the amount of damages issued in a wage and salary lawsuit. For instance, receiving prior compensation through your company’s internal dispute resolution department may limit or even prevent your ability to recover damages in court.
Do I Need a Lawyer for Assistance With My Back Wage Dispute?
Filing a claim for back wages can be easy or a challenge depending on your situation. You may need to hire an employment lawyer for advice on which type of legal remedy to pursue. A lawyer can also assist you with filing a claim for back wages and represent you in court, if necessary. A lawyer can also assess and explain your chance of success so you can make an informed decision.