Back pay refers to compensation for work that was either already performed or work that could have been performed if not for the interference of another party.
Workers’ compensation in the United States is governed by the Fair Labor Standards Act (FLSA). An employee who believes their employer has paid them less than what they are owed, either contractually or under the provisions of the FLSA, can file a claim with the U.S Department of Labor for back pay under 29 U.S.C. §216.
An employer is liable for back pay if they unlawfully withheld an employee’s compensation for any reason, although a few of the common reasons include: failure to comply with minimum wage standards, failure to pay 1.5 times the standard compensation rates for any hours worked per week beyond 40, and management confiscating or taking a cut of service tips.
A party may also be entitled to back pay if they can successfully show that they were wrongfully terminated. Because the United States generally follows at-will employment, a party seeking backpay on grounds of wrongful termination must show that the termination was discriminatory, retaliatory, or the result of the employee exercising a right. A party who succeeds on a wrongful termination claim is entitled to back pay for all the work the employee would have completed between the time of firing and the wrongful termination verdict.
See also: front pay
[Last updated in June of 2022 by the Wex Definitions Team]