Front Pay

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What is Front Pay? 

Front pay refers to equitable remedy or a type of damages that can be awarded to plaintiffs in wrongful termination employment claims, discrimination, or anti-retaliation cases. The purpose of front pay is to provide compensation that can help victims of employment discrimination get back on track and be “made whole” despite the discrimination that they suffered. Giving front pay will enable the individual to recover financially. Hopefully, it can restore the wages they would have earned if the employment discrimination had not been committed. 

For example, an employee was wrongfully terminated by an employer as an act of retaliation. The employee decided to file a case in court and eventually won. During the proceedings which took two years, the employee’s old position was eliminated. Therefore, reinstatement will not be possible. In this case, the employee is entitled to front pay which will cover lost wages, emotional distress, and not being able to find comparable work for two years. 

Is Front Pay the same as Reinstatement? 

No, front pay and reinstatement are not the same. Reinstatement refers to the action of giving the plaintiff back the old position or job that they lost without loss of compensation, benefits, and seniority. On the other hand, front pay is awarded when the plaintiff cannot be reinstated such as when the position has already been filled or if the position no longer exists. In some cases, front pay is also awarded when reinstatement is possible but will not be an available course of action for reasons that are particular to each claim. For example, if it is no longer advisable for the plaintiff to go back to their old job because of too much hostility or anger from the defendant-employer. 

Is Front Pay the same as Back Pay? 

It is easy to confuse front pay and back pay. But, if you look closely, they are different forms of compensation. 

Back pay is the wages and benefits that an employer owes an employee after a wrongful termination or employee retaliation. These are the wages that a person would have earned if they were not fired from their job. Back pay is calculated as the wages and benefits from the day the employee was fired up to the day that the court ruled in the employee’s favor. If back pay is awarded to an employee, the employer is not required to give back pay if the employee accepts an unconditional offer for reinstatement to their former position or a similar position in the company. 

Now, let’s take a look at front pay. As we have mentioned above, front pay is awarded to an employee for compensation as if termination did not happen as they try to find a comparable position or job in a different workplace. Front pay is paid when the employee cannot be reinstated to their former position. In this situation, there is no longer a job opportunity with the former employer. 

How is Front Pay determined? 

There is no uniform formula in calculating the amount of front pay to be awarded to a plaintiff. The judge determines the amount of front pay that is due. However, there are several factors that a court can consider in deciding the amount of front pay. The following are some considerations in determining front pay: 

Who is in charge of investigating charges filed by employees against their employers? 

The U.S. Equal Employment Opportunity Commission, also known as EEOC, is the organization that is responsible for making sure that unlawful employment discrimination is prevented and corrected. The EEOC takes charge of investigating charges filed by employees against employers. To decide if a charge has merit, the EEOC’s process includes data and information gathering, conducting on-site visits, and interviewing witnesses. 

Should the EEOC deem a charge to have merit, they can invite both the employee and the employer in a mediation or conciliation which can result in a settlement. If they do not arrive at an agreed resolution of the issue after the mediation process, the employee can file a lawsuit in federal court. 

Are there limits on Front Pay? 

Front pay amounts vary depending on if the issue is settled under a conciliation process with the EEOC and a settlement agreement is reached, or if a lawsuit is filed and pursued in a federal court. 

While front pay is largely determined by the employee’s pay rate before being terminated from work and other factors, the limits to front pay apply to additional damages over the basic front pay. Examples of additional damages are pain and suffering that the employee experiences, emotional distress, and punitive damages. 

The limits on the amount of compensatory and punitive damages that can be awarded to a person. The limits depend on the employer’s size are as follows:

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