Back Pay Definition
Back pay refers to the difference between what you paid an employee and what you should have paid (i.e., what the employee is lawfully entitled to).
Back Pay Extended Definition
Any outstanding employee payment for work performed prior to the present pay period is known as back pay. It can also be defined as the difference in payment made to the employee and the amount the employee should have been paid by the employer.
Employers may need to pay employees back pay for:
- Overtime wages
- Minimum wage
- Promised wage increases
Employers may owe back pay due to a payroll mistake. Or, the employer may also withhold payments willfully.
Salaried employees, hourly workers, part-time employees, freelancers, and consultants are all entitled to back pay.
Last Updated By
Rachel Blakely-Gray | Feb 15, 2023