What Is Back Pay? How to Collect Money Owed

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Back pay is the difference between what an employee was paid and the amount he or she should have been paid. Withheld wages may have been from actual hours worked, pay increases or promotions, or for work that could have otherwise been completed if there had not been some obstacle.

The Fair Labor Standards Act (FLSA), the Davis-Bacon Act and the Service Contract Act have provisions for recovering unpaid minimum and/or overtime wages.


How to Collect Back Pay

There are several methods provided by the FLSA to recover unpaid minimum and/or overtime wages:

1.  Supervision or litigation by the Wage and Hour Division or the Secretary of Labor.

2.  The Secretary of Labor can instigate a lawsuit for back wages and an equal amount as liquidated damages.

3.  Employees are also able to file private suit against their employer for back pay plus attorneys' fees and court costs. In many cases, benefits are also included in the total back amount to be repaid.

4.  The Secretary of Labor can obtain an injunction to restrain an employers from violating the Fair Labor Standards Act, including unlawfully withholding proper minimum wage and overtime pay.

An employee may not bring a suit under the FLSA if he's received back wages under the supervision of the Wage and Hour Division, or if the Secretary of Labor already filed suit to recover the wages.

There is a two-year statute of limitations on recovery of back pay. However, in the case of willful violations, a three-year statute of limitations applies. 

When possible, keep documentation including copies of your pay stubs and time sheets or a log of your hours. It will be easier to retroactively claim unpaid wages if you can document when you worked and what you were owed.


Back Pay After Wrongful Termination

Back pay may also come into play after wrongful termination as the amount of salary and benefits that an employee claims he is owed after he's improperly fired. Back pay is usually calculated from the date of termination to the date a claim's judgment was determined.

For example, say a company fired an employee on May 1, 2012. The employee thought that the termination was unwarranted and filed a claim against the company. During the case it was revealed that the plaintiff's manager had a personal problem with the employee and fired him for reasons other than his conduct and performance. The court required the employer to reinstate the employee and rendered the judgment on November 1, 2015. The employer is liable for back pay for three and a half years.

For more information visit the Department of Labor web site: Back Pay

Related Articles: Wages and Salary Information | Pay and Paychecks | Employment Law

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