Back pay

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Back pay

Back pay refers to the amount of money that an employee is owed for work that was performed in the past but was not paid at the time it was due. This can occur for various reasons, such as an error in payroll processing, a delay in receiving payment, or a dispute over wages. Back pay can also be awarded as a result of a legal settlement or a court order, typically in cases of wage discrimination or wrongful termination. It is calculated by determining the amount of wages that should have been paid during the period in question and then adding any applicable interest or penalties. Back pay is typically paid in a lump sum, but can also be spread out over a period of time. It is an important aspect of fair labor practices and ensures that employees receive the full compensation they are entitled to for their work.