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What is Back Pay? – Definition, Reasons and Examples
What is back pay?
Definition: Late payments can be defined as payments or other
benefits, such as promotions, bonuses, salary increases, etc., that an employer
owes an employee for work that he has performed in the past. Generally, it is
the amount of the employee's salary or compensation that the employee cannot
receive in total due to wrongful termination or salary irregularities by the
company.
Debt is the amount of wages or salaries that a company owes
its employees. It can also be understood as the difference in the amount
between what is paid to the employee and the amount that he really should have
paid.
Generally, wage arrears include past wages and unpaid wages
to which the employee is entitled, but the department of labor did not pay or
was illegally fired.
A late payment is a means for the business to correct your
payment error or violation. This could have been a deliberate or accidental
action by the company. The reasons are that the employee cannot complete the
work, illegal dismissal, etc.
The company is responsible for late payments. In some cases,
the company will be forced to pay the debt by court order. If the court is
informed that the company has committed a wage violation, the company must
correct all employees who have suffered from non-payment of wages. If a company
withholds part of an employee's salary or wages without permission, that
employee is fully entitled to a salary refund.
How does Back Pay work?
If the employer withholds a portion of an employee's salary
without the employee's permission, that employee will be eligible to receive
salary. For example, if he leaves the company, it is possible that he has
arrears in wages corresponding to the hours he worked.
This salary is due to him on his last paycheck, but if he
does not receive it on the normal payday date for the last pay period worked,
it will be called arrears.
The Davis-Bacon Act, the Fair Labor Standards Act (FLSA),
and the Service Contract Act have specific provisions regarding the collection
or collection of back wages. Some of the methods the FLSA offers to collect
back wages:
The Wage and Hour Department or the Minister of Labor must
control the payment of unpaid wages, sometimes through legal action.
The Minister of Labor must initiate a lawsuit for
non-payment of wages and an equal amount of anticipated damages.
Does the employee have the right to submit? a private claim
against an employer for failure to pay wages and attorneys' fees and legal
fees. Even in some cases, employees also have the right to demand that payments
be included in the total amount owed.
The Secretary of Labor can obtain a court order prohibiting
any employer from violating the FLSA. Such violations can include illegal
withholding of the appropriate minimum wage and overtime work.
Example of non-payment or non-payment of wages
On April 20, 2018, the IT company laid off an employee in a
short time. This employee has filed a lawsuit against the company. In the
course of the litigation, it becomes apparent that the employee's manager fired
him for personal reasons and not for inappropriate professional behavior.
Upon confirmation of the illegal dismissal, the court orders
the company to reinstate the employee at work. The decision was made on May 24,
2021. Therefore, the company is liable for delinquency by the company from
April 20, 2018 to May 24, 2021.
Another example. An employee promoted on April 15, 2021 will
receive a salary increase. However, this employee received a higher salary for
April. Therefore, this employee will receive a refund in the next month.
Reasons for refund
The following is the reason for the refund.
1. An employment contract has been illegally terminated.
An employee has every right to demand the return of his
salary in the event of illegal dismissal. The amount of salary arrears is
calculated from the date of dismissal of the employee until the date of the
final decision. Such employees have the right to demand salaries and benefits
from the company.
2. Inability to pay employees the minimum wage.
This is one of the common problems that a contract worker
faces. Workers must receive less than the minimum wage per day established by
law. Failure to pay the minimum wage will result in a refund. To which the
employee has the legal right to demand it.
3. Overtime
There are times when an employee has to work overtime.
Overtime must be calculated. This
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