It is a part of the payment from the previous employment period made after a specific time. There can be various reasons for the payment delays, such as wage rate changes or bank details issues. There are three major categories of classifying Retro pays:
Arbitration Awards: This is a salary amount given to the worker for resolving a dispute outside the judicial system.
Retroactive salary payments: it refers to the compensation that hr employers make to cover the payment gaps that have occurred due to salary delays, overtime or bonuses.
Litigation and grievance settlements: This refers to the employer’s payment to resolve a specific dispute without any official trial.
Types of retro pay in HRM
Missed pay: If the employer has mistakenly missed a salary or payment of an employee
Overtime earnings: if the employee has worked more than the regular shift timings
Wrongful termination: if the employer has terminated the employee without any specific reason.
Multiple roles one employee: If a single employee is working for a different job role but not paid the same salary.
Sift differentiation: If the employee is shifted to different work shift hours, such as morning to night.
Bonuses and commission: If the employee gets a bonus or commission for his or her exceptional work.
Difference between retro pay and back pay
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Back pay |
Retro Pay |
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It refers to the payment that the employee demands when they are not paid at all for a specific pay period. |
It is a payment that the employers made due to a shortfall and can be done after a pay period. This can be done due to miscalculations. |
