What is Back Pay?

Back pay is the amount of money an employer owes an employee for work performed but not properly compensated. Back pay can arise from work that:

• Was completed but never compensated
• Could have been done, but the employee was barred from doing it
• Should have been paid differently, given the circumstances at the time

It can also be unpaid money after a raise that was not promptly processed. Generally, it’s any financial difference between what the employer honored in a paycheck and what is stated in their contract or by law on minimum wages and overtime pay.

Back pay can include salary, hourly wages, commissions, overtime, bonuses, or fees and a penalty the employer should pay for violating the wage agreement.