If you're an employee, there's nothing worse than working hard only to find out that you aren't getting paid correctly. Perhaps you weren't getting the mandatory overtime pay, or your employer was withholding your bonuses or benefits. Whatever the case may be, you're entitled to recover the wages you're owed, which is known as back pay. However, calculating back pay can be difficult, especially if you're unfamiliar with the process.
Understanding What Back Pay Is
Back pay is the compensation an employee should receive for the wages they lost due to an employer's noncompliant payment practices. In most cases, the calculation of back pay is straightforward. You take the wages that you were entitled to, say, your overtime pay, and subtract the wages that you were paid, say, your standard pay. The result of your calculation, if any, would represent your back pay. However, some exceptions may arise, so you'll need an expert to help you with your calculation.
Where to Start Your Calculation
Calculating back pay starts with identifying your back pay's source. For example, suppose you discovered you were not paid adequately for overtime work. In that case, you'll want to calculate the overtime you worked during which you were wrongfully denied overtime compensation. You'll also want to determine the rate at which the overtime should have been paid to you, including any liquidated damages or penalties allowed by law.
Calculating the Overtime Pay
Once you know how many hours of overtime you worked during the back pay period, you'll want to determine the appropriate overtime rate. Typically, overtime wages are based on the employee's hourly rate plus an additional half of the employee's hourly rate. As such, if an employee makes $10 per hour and works an additional three hours at the overtime rate, their overtime rate would be $15 per hour. You can then use this rate and the number of overtime hours worked to calculate the back pay.
Other Compensation to Consider
When considering back pay, don't forget to include all unpaid compensation, including bonuses, commissions, and vacation payments. To make these calculations more manageable, you'll want to gather all your pay stubs, employment contracts, and timekeeping records as proof of your employer's failure to compensate you fully.
Hundreds of Millions Recovered in Unpaid Wages & Overtime
At Josephson Dunlap, we have years of experience helping clients recover lost wages and other damages in personal injury cases. If you've been injured and need help calculating your back pay, contact us today at (888) 742-7242 for a free consultation. We'll help you understand your rights and fight for the compensation you deserve.