‘Back pay’, also known as back wages, refers to the amount of money that an employer owes to an employee for work that was performed but not properly compensated at the time it was due. It typically arises in situations where there has been a wage or labour law violation, such as:
Underpayment: If an employer fails to pay an employee the agreed-upon or legally mandated wages, including minimum wage, overtime pay, or promised bonuses, the owed amount becomes back pay.
Unpaid Hours: Back pay can result from unpaid hours worked by an employee. This can occur due to an oversight by the employer, incorrect record-keeping, or disputes over hours worked.
Wage and Hour Violations: Violations of labour laws, such as not providing required breaks, misclassifying employees as exempt from overtime when they are not, or not paying for off-the-clock work, can lead to back pay claims.
Discrimination or Retaliation: Back pay may be awarded in cases of workplace discrimination or retaliation when an employee was denied a raise, promotion, or bonus based on unlawful grounds.
Arbitration or Legal Settlements: In legal disputes or arbitration cases, back pay may be ordered as part of a remedy when an employee’s rights have been violated.
Collective Bargaining Agreements: In unionised workplaces, back pay disputes can arise if the employer violates the terms of the collective bargaining agreement, resulting in unpaid wages or benefits.
The process of obtaining back pay typically involves filing a complaint with a labour department or agency, seeking legal action, or going through arbitration or mediation, depending on the specific circumstances and applicable laws. If it is determined that the employee is owed back pay, the employer is typically required to pay the owed wages, including any interest or penalties as specified by labour laws.
Back pay is an important legal concept designed to protect the rights of employees and ensure that they receive the compensation they are entitled to for their work. It serves as a remedy to rectify wage and labor law violations and to provide financial redress to affected workers.