Front Pay is a kind of compensation given to plaintiffs for unethical and even unlawful practices like discrimination, wrongful termination, etc. This is awarded to terminated employees in lieu of the following:
The amount of money they would have earned between the case filing and the court's verdict.
The amount of money they would have earned during the time they spent on finding a new job.
Whatever loss the employee had suffered, for instance, trauma, damages to status and reputation, etc.
The main idea behind front pay is to help individuals that suffered from discrimination and injustice during their employment to get back on their feet and feel vindicated.
Compensating the wronged individual through front pay can help him or her get back on their feet financially. If done correctly, it will hopefully be sufficient to reimburse individuals for lost wages, trauma, and other losses.
Let's say that an employer has unlawfully terminated an employee out of anger or for no valid reason. The employee then took the matter to court and ultimately prevailed in a long 3-year process. But the employee's old position was taken up by someone else, so reinstatement is out of the question.
In this case, the employee is eligible to receive payment for 3 years to compensate for the wages they would have earned during that time and additional pay for whatever trauma and distress they had to go through because of that unjust incident.
Front Pay vs. Future Earnings
There is a clear distinction between front pay versus future earnings. Front pay is intended to repay employees who have been wrongly sacked. Future earnings are a compensation amount that can be collected for personal injury cases. Therefore, the two are distinct legal claims.
Front Pay vs. Back Pay
Ex-employees who are not rehired or reinstated inside the company are entitled to front pay.
Whereas ex-employees are entitled to back pay in addition to the earnings they are owed. However, this obligation is nullified if the employee accepts any reinstatement offers to rejoin the same company or job position.
Attorneys and jurors might use the victimized employee's previous salary, paychecks, and pay stubs to calculate back pay.
However, the calculation for front pay needs to be clarified. In many circumstances, the judge establishes the pay owed. Courts can consider the employee's age, length of work, how long it takes a person to obtain a similar position, and other factors while assessing front pay.
Who are the Authority In-Charge of Front Pay?
The EEOC, or Equal Employment Opportunity Commission, prevents and rectifies unlawful employment discrimination in the United States of America.
The Equal Employment Opportunity Commission (EEOC) investigates employee complaints against businesses. They have a process for deciding whether or not a charge has validity, which involves collecting info and intel, conducting on-site inspections, interviewing witnesses, etc.