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Back Pay

Back Pay

Definition

Damages claimed by a former employee representing wages and benefits that would have been paid to the former employee from the time the employee was terminated up to the time in which a claim is settled or a judgment is rendered. For example, if an employee is wrongfully terminated on January 1, 2013, a jury award on January 1, 2015, would encompass 2 years of "back pay." The majority of, but not all, employment practices liability insurance (EPLI) policies include "back pay" within their definitions of "covered damages."

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