• Jul 02, 2024
  • Wage & Hour

What are Back Wages?

what are back wages?

Back wages in California refer to the amount of money an employer owes to an employee for work performed (where they are paid at least proper minimum wage), but not properly compensated. Back pay wages can arise from various situations where employees are underpaid or owed wages, including unpaid overtime, unpaid minimum wages, missed meal and rest breaks, or any other form of wage theft for hourly wages. Here’s how back pay works in California:

Definition and Causes

  • Unpaid Wages: Under the Fair Labor Standards Act, back pay wages include any unpaid regular wages, overtime pay, and other forms of compensation that the employee was entitled to but did not receive. This can include promised bonuses or commissions.
  • Wage Violations: Common causes of back pay wages include not paying an employee for all hours worked, failing to pay overtime, misclassifying employees as exempt from overtime, and not providing mandatory meal and rest breaks​​.

Legal Protections

  • California Labor Code: The California Labor Code provides strong protections for workers to make sure they receive proper compensation for their work. Employers are legally obligated to pay employees all wages owed, on time and in full.
  • Overtime Laws: Under the Fair Labor Standards Act, California has specific overtime laws that require employers to pay one and a half times the regular rate for hours worked over 8 in a day or 40 in a week, and double time for hours worked over 12 in a day​​.
  • Meal and Rest Breaks: The wage and hour division of California law stipulates that employees are entitled to a 30-minute meal break for every 5 hours worked and a 10-minute rest break for every 4 hours worked. Failure to provide these breaks can result in back pay wage claims​​.

Claiming Back Pay Wages

  • Filing a Claim: Employees can file a wage claim with the California Division of Labor Standards Enforcement (DLSE), also known as the Labor Commissioner’s Office, to recover back pay wages. This process involves submitting evidence of the unpaid wages and any relevant documentation, like payroll records, time cards for a certain pay period, and other circumstances that show an unlawful withholding of compensation.
  • Legal Action: Employees can also pursue legal action through a private suit to recover back pay wages. This can include claims for unpaid wages, interest, penalties, and attorneys’ fees​​. The attorneys at Lawyers for Justice, PC have helped countless California workers get the back pay they deserve.

Penalties for Employers

  • Waiting Time Penalties: If an employer purposely fails to pay all wages due at the time of an employee’s termination, they may be liable for waiting time penalties. These penalties can amount to the employee’s daily wage for each day the wages remain unpaid, up to a maximum of 30 days​.
  • Interest and Fines: Employers may also be required to pay interest on unpaid wages and could face additional fines and penalties for violating wage and hour laws.

Examples of Back Wages

  • Unpaid Overtime: If an employee works 50 hours in a week and is only paid for 40, the 10 hours of unpaid overtime would constitute back pay wages.
  • Misclassified Employees: An employee misclassified as exempt from overtime when they should be non-exempt could claim back pay wages for all unpaid overtime hours.

Back Pay vs. Retro Pay

Both back pay and retro pay involve compensating employees for past work, but they address different issues and are used in different contexts.

Back Pay

Back pay refers to the wages and benefits that an employee is owed for work performed, but not properly compensated for at the time. This often involves unpaid regular wages, overtime, or other benefits.

Common Causes:

  1. Wage Violations: Employers failing to pay minimum wage, overtime, or other legally required compensation.
  2. Wrongful Termination: Employees who are wrongfully terminated may receive back pay for the period they were unemployed.
  3. Discrimination or Retaliation: Cases where employees were unfairly compensated due to discrimination or retaliation.

Legal Context:

  • Back pay is often awarded in legal settlements when an employer is found to have violated California labor laws.
  • It can include not just unpaid wages, but also interest, penalties, and sometimes attorney’s fees or court costs.

Retro Pay

Retroactive pay, or retro pay, refers to the compensation paid to an employee when their pay rate changes, or a pay adjustment is made for a past period. This can occur because of an administrative error or when pay increases are applied retroactively.

Common Causes:

  1. Administrative Errors: Mistakes in payroll processing that resulted in underpayment.
  2. Pay Rate Changes: Adjustments due to promotions, raises, or changes in pay scales that apply to previous pay periods.
  3. Union Contracts: New union agreements may include retroactive pay increases dating back to the start of negotiations.

Legal Context:

  • Retro pay corrects the difference between what was paid and what should have been paid according to the revised pay rate.
  • It does not necessarily involve legal violations, but instead corrects payroll discrepancies.

Example: An employee was supposed to receive a raise starting in January but the raise was not processed until April. The retro pay would cover the difference between the old and new pay rates for the period from January to April.

Key Differences

  1. Reason:
    • Back Pay: Owed due to unpaid wages for work performed, often related to legal violations.
    • Retro Pay: Adjustment due to a change in pay rates or corrections to payroll errors.
  2. Context:
    • Back Pay: Typically involves legal actions or settlements.
    • Retro Pay: Commonly involves administrative corrections and adjustments.
  3. Calculation:
    • Back Pay: Based on hours worked and wages not received.
    • Retro Pay: Based on the difference between the old and new pay rates over the affected periods.

Understanding these distinctions helps employers manage payroll accurately and ensures employees receive the compensation they are entitled to.

Back Pay Award

A back pay award is a remedy provided to employees who have been underpaid, wrongfully terminated, or unlawfully deprived of their rightful wages. It’s a type of compensation that aims to make the employee whole by covering the wages and benefits they would have earned had the violation not occurred.

Examples of Back Pay Awards

  1. Wrongful Termination: Employees who are improperly fired may receive back pay for the period they were out of work. This can includes wages, benefits, and any bonuses they might have earned during that time​.
  2. Wage Violations: Back pay can be awarded when employers fail to pay minimum wage, overtime, or other earned wages. This can include situations where employees are misclassified as exempt from overtime, or paid less than the minimum wage​.
  3. Discrimination: In cases of employment discrimination based on race, gender, age, or other protected characteristics, back pay can be awarded to compensate for lost wages and benefits due to discriminatory practices​​.
  4. Retaliation: Employees who face retaliation for asserting their rights, such as filing a complaint or participating in a workplace investigation, may also be eligible for back pay​​.

Calculation of Back Pay

  • Wages: The primary component of back pay is the wages the employee would have earned during the period of the violation.
  • Benefits: Can include lost health insurance, retirement contributions, and/or other employment benefits.
  • Interest: Back pay awards often include interest on the unpaid wages to compensate workers for the delay in payment.
  • Penalties: In some cases, employers may also be required to pay penalties for violations, which can increase the total back pay award.

Sample Situations with Back Pay Awards:

  • Discrimination Case: An employee who was denied promotion because of gender discrimination could receive back pay for the difference in wages between their current position and the higher-paying position they were denied.
  • Overtime Violation: An employee who regularly worked overtime without proper compensation could receive back pay for all unpaid overtime hours, calculated at the appropriate overtime rate​​.

Back Pay – FAQ

how much can you sue a company for not paying you? Every case is different. If you wish to sue your employer for not only back pay, but another payment violation, call Lawyers for Justice, PC today for a free consultation.

can you sue your employer for not paying you? Yes. In California, employers must pay their employees by specific deadlines. If they do not, employees have the right to file a wage claim or employment lawsuit.

can you sue for being underpaid? Sometimes the reason for underpayment can be due to improper reasons, like workplace discrimination or harassment. In cases like those, yes, you can file a lawsuit for workplace discrimination, if you can prove you were discriminated against.

can i sue my job for not paying me on time? Yes, any California employee can sue for unpaid wages if they have not been paid correctly according to the state’s labor laws. This can include issues related to minimum wage, overtime, and various wage and hour violations.

how to sue a job for not paying you? Wage laws can be hard to navigate, but Lawyers for Justice, PC (LFJ) helps workers by offering free consultations. They do not charge any upfront fees to retain legal services. You only pay if you win.

can you sue for being paid under minimum wage? An employer is legally mandated to pay minimum wage. If you are not getting paid at least minimum wage, you could be owed compensation.

what do you do if your employer doesn’t pay you? You can file a report with the state, or contact a California employment lawyer at LFJ so they can get you what you are owed.

is retro pay mandatory? Yes. If you were underpaid, or not paid at all for some – or all – of your work, your employer must provide payment to correct the error.


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