Back pay is current payment to a current or former employee for services performed in a prior period. It also includes payment for non-work periods under federal or state laws intended to create or protect employment relationships and right to wages (such as unlawful refusal to hire or unlawful discharge), as well as increases in pay (such as wage and hours violations on overtime pay).
Back pay awarded under a federal or state statute or by court or administrative agency order is considered earnings and will be allocated to prior periods if the order/award specifies that it is to be allocated and states the allocation amounts and time periods. However, for the back pay to be considered IMRF earnings, the recipient must be an employee with the same IMRF employer and actively participating in IMRF at the time the award is paid. Such earnings are reportable in the month paid, and cannot be allocated to previous months unless specified in the order, award, or statute. The member will not receive IMRF service credit for months without earnings.
A lump sum settlement of a claim (including settlement of a potential legal claim) which does not identify the settlement amount as back pay and does not identify the period covered, constitutes IMRF earnings for an active member but cannot be allocated to the previous months even though approved by a court or agency. The member will not receive IMRF service credit for months without earnings.
Back pay awarded to a person who is no longer employed or no longer actively participating, and who is not re-employed or re-enrolled under the award, is not considered IMRF earnings and is not reportable to IMRF.