Front Pay vs. Back Pay

HR Glossary for HR Professionals

Glossary of the most common HR terms and acronyms to assist professionals navigating the ever-growing and ever-changing world of HR terminology.

Front Pay vs. Back Pay

What is Front Pay?

Front pay is money that’s paid to employees as an equitable remedy when a worker is subjected to workplace discrimination, according to the Equal Employment Opportunity Commission (EEOC). For example, if a court finds that an employee is wrongfully fired, they can be awarded front pay in a lawsuit with their former employer.  

These funds are typically awarded to employees as “make whole” relief for wages lost instead of reinstatement or nondiscriminatory placement.

What is Back Pay?

Back pay is another common wage violation remedy that requires an employer to fully compensate an employee in cases where the worker was underpaid. For example, according to attorney Eric Bachman of Zuckerman Law, an employee who proves they were discriminatorily denied a promotion may be entitled to back pay damages to make up the difference between what they were being paid and what they should have or could have been paid. 

Typically, the Department of Labor (DOL) supervises back pay claims under the Fair Labor Standards Act (FLSA).

Front Pay vs. Back Pay: What’s the Difference?

While circumstances involving front and back pay may seem similar and sometimes even nearly identical, there is a key difference between front pay vs. back pay:

  1. Front pay is awarded to former employees whose employers can’t rehire or reinstate them within the organization.
  2. Back pay is also awarded to former employees but this obligation can be voided if the employee accepts an offer to be reinstated to the same or similar position that accounts for the wages that they’re due.

Ultimately, the differences between front pay vs. back pay are subtle yet consequential, particularly for employers that are subjected to wage disputes from former and current employees.

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