RS 01401: Wages
TN 8 (11-93)
A. Definitions
1. General
Back pay is payment received in one period for actual or deemed employment in an earlier period. It includes pay made under Federal or State laws intended to create an employment relationship or to protect an employee's right to wages. The employee need not have worked during the period in question.
2. Back Pay Not Under a Statute
Back pay not under a statute is an agreement between the employer and employee without any award, determination or agreement approved or sanctioned by a court or administrative agency.
Delayed wage payments and retroactive pay increases resulting from union negotiation or payments under local ordinances or regulations are nonstatutory payments.
3. Back Pay Under a Statute
Back pay under a statute is a payment by the employer following an award, determination or agreement approved or sanctioned by a court or administrative agency charged with enforcing a Federal or State statute protecting an employee's right to employment or wages.
Examples of these statutes are:
Age Discrimination in Employment Act;
Americans with Disabilities Act;
Civil Rights Act;
Fair Labor Standards Act, Walsh-Healey Act, and Davis Bacon Act;
National Labor Relations Act or a State labor relations act; and
State minimum wage laws.
Payments based on legislation comparable to and having a similar effect as those listed above may also qualify as statutory back pay.
The fact that the award amount may have been agreed to by the litigants involved, and not determined by the court or administrative agency, does not affect the status of the payments. The payments still constitute back pay under a statute.
B. Policy
All back pay, except penalties, is wages if paid for covered employment.
NOTE: Award payments by a union are not wages under the National Labor Relations Act unless a National Labor Relations Board order makes the employer and union both liable for the payment of the award.
C. Reference
Employer inquiries about filing backpay reports, RM 01105.009C.4.