Front pay

What is front pay?

Front pay is a type of monetary compensation awarded to an employee following unlawful termination, intended to cover the future earnings the employee would have received had they not been wrongfully dismissed. It is commonly used when reinstatement to the original position is not feasible, such as in cases involving workplace hostility, retaliation, or dissolved roles.

Front pay is distinct from back pay, which compensates for lost wages from the termination date to the date of judgement. Front pay looks forward from the judgement date and estimates how long it will reasonably take the former employee to secure comparable employment. It can include projected pay, benefits, bonuses, and raises the employee would likely have received.

This remedy is most frequently seen in US federal and state employment litigation, especially in cases involving discrimination, retaliation, or other violations of the Civil Rights Act, the Age Discrimination in Employment Act (ADEA), or the Americans With Disabilities Act (ADA). Courts or juries decide whether to award front pay and for how long, based on factors like the employee’s age, career trajectory, job market conditions, and efforts to find new work.

Why does this matter for employers?

Front pay can significantly increase the financial exposure of employers facing wrongful termination claims. While reinstatement is generally considered the preferred remedy under US employment law, courts often award front pay when returning the employee to the workplace would be impractical or counterproductive — particularly if trust has broken down.

To minimise the risk of front pay awards, employers should:

• Follow legally sound termination procedures
• Maintain detailed documentation of performance issues
• Ensure compliance with anti-discrimination laws
• Train managers to avoid retaliatory or discriminatory practices

Early legal advice, clear communication, and structured severance policies can also help prevent disputes that might escalate to litigation.

How can Remote help?

While Remote does not provide legal representation, our HR and compliance experts ensure that termination procedures follow local laws and best practices across all US states. This helps reduce the likelihood of wrongful termination claims and costly remedies like front pay. Learn more.