Front Pay is a type of monetary compensation awarded to employees in employment law cases when reinstatement to their former position is not feasible or appropriate. It represents the amount of future wages and benefits the employee would have earned had they remained employed. Front pay is commonly awarded in discrimination, retaliation, or wrongful termination lawsuits and is intended to make the employee “whole” until they can secure comparable employment or reach a point where reinstatement would have reasonably occurred.
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Key Facts
- Purpose: Compensates employees for future lost earnings due to unlawful termination or failure to rehire.
- Alternative to Reinstatement: Used when returning to the workplace would be impractical due to hostility, company closure, or lack of position.
- Determination: Courts consider age, time needed to find similar work, career trajectory, and the employee’s efforts to mitigate damages.
- Not Guaranteed: Front pay is awarded at the discretion of the court and is based on evidence.
- Taxable Income: Like regular wages, front pay is considered taxable and must be reported as income.
1. What is front pay in employment law?
Front pay is compensation for future lost wages awarded when an employee cannot be reinstated after being wrongfully terminated or discriminated against.
2. When is front pay awarded instead of reinstatement?
Front pay is awarded when reinstatement is not possible or practical due to factors like workplace hostility, elimination of the position, or deteriorated working relationships.
3. How is front pay calculated?
Courts estimate how long it would take for the employee to find comparable employment and multiply that by the employee’s expected salary and benefits during that time.
4. Is front pay taxable?
Yes, front pay is subject to income and employment taxes, just like regular wages.
5. How is front pay different from back pay?
Back pay covers wages lost from the time of termination up to the judgment or settlement date, while front pay covers future expected losses after that point.
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