Front Pay

What is Front Pay?

Front pay is an equitable remedy or type of damages that can be awarded to plaintiffs in wrongful termination, discrimination, or anti-retaliation cases. The goal of front pay is to provide compensation that can assist victims of employment discrimination in getting back on track and being "made whole" despite the discrimination they experienced. Giving the individual upfront pay will allow him or her to recover financially. Hopefully, it will be able to compensate them for the wages they would have earned if the employment discrimination had not occurred.

For example, an employer may have wrongfully terminated an employee in retaliation. The employee decided to go to court and eventually won. During the two-year process, the employee's previous position was eliminated. As a result, reinstatement will be impossible. In this case, the employee is entitled to advance pay to cover lost wages, emotional distress, and the inability to find comparable work for two years.

The U.S. Equal Employment Opportunity Commission, also known as the EEOC, is the organisation in charge of preventing and correcting unlawful employment discrimination. The EEOC is in charge of investigating employee complaints against employers. The EEOC's process for determining whether a charge is meritorious includes gathering data and information, conducting on-site visits, and interviewing witnesses.

If the EEOC believes a charge is valid, it can invite both the employee and the employer to a mediation or conciliation session, which can result in a settlement. If they do not reach an agreement after the mediation process, the employee may file a lawsuit in federal court.

Is Front Pay the same as Reinstatement?

Reinstatement is the action of restoring the plaintiff to their previous position or job that they had lost without loss of compensation, benefits, or seniority. Front pay, on the other hand, is awarded when the plaintiff cannot be reinstated, such as when the position has already been filled or no longer exists. Front pay is also awarded in some cases when reinstatement is possible but will not be an available course of action for reasons unique to each claim. For example, if the plaintiff's return to their old job is no longer advisable due to excessive hostility or anger from the defendant-employer.

Is Front Pay the same as Back Pay?

Back pay refers to the wages and benefits owed to an employee by an employer following a wrongful termination or employee retaliation. These are the wages a person would have received if they had not been fired from their job. Back pay is calculated by adding the employee's wages and benefits from the day he or she was fired to the day the court ruled in favour of the employee. If an employee is awarded back pay, the employer is not required to pay it if the employee accepts an unconditional offer of reinstatement to their former position or a similar position within the company.

As previously stated, front pay is awarded to an employee as compensation as if termination did not occur while they seek a comparable position or job in a different workplace. When an employee is unable to be reinstated to their previous position, they are paid in advance. In this case, the former employer no longer has any job openings.

How is Front Pay calculated?

There is no standardised formula for determining the amount of front pay to be awarded to a plaintiff. The amount of front pay due is determined by the judge. However, a court can consider a number of factors when determining the amount of front pay. Some factors to consider when determining front pay are as follows:

  • The period of time between when the plaintiff filed the discrimination or anti-retaliation case and when the court rules in the plaintiff's favour.
  • The plaintiff's age
  • How long the plaintiff was employed by the defendant employer
  • Plaintiff's pay or wage rate prior to termination
  • How long the plaintiff can find comparable work with reasonable effort
  • Work and life expectancy of the plaintiff

What are the limits on Front Pay? 

The amount of front pay varies depending on whether the issue is resolved through conciliation with the EEOC and a settlement agreement is reached, or if a lawsuit is filed and pursued in federal court.

While front pay is largely determined by the employee's pay rate prior to termination of employment and other factors, front pay limits apply to additional damages in excess of the basic front pay. Additional damages include the employee's pain and suffering, emotional distress, and punitive damages.

The maximum amount of compensatory and punitive damages that can be awarded to an individual. The following are the limits based on the size of the employer:

  • For employers with 15-100 employees, it is $50,000.
  • For employers with 101-200 employees, it is $100,000.
  • For employers with 201-500 employees, it is $200,000.
  • For employers with more than 500 employees, it is $300,000.
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