What are compensatory damages in employment law?

Compensatory damages in employment law refer specifically to monetary damages awarded to an employee to compensate for losses resulting from legal violations, such as wrongful termination, discrimination, or a breach of contract. These damages aim to restore the injured party to the position they would have been in had the violation not occurred. This could include reimbursement for lost wages, benefits, and sometimes even emotional distress related to the unlawful employment action. While punitive damages are intended to punish the wrongdoer for their actions and deter similar conduct in the future, compensatory damages are primarily focused on making the injured party whole again financially. This definition captures the essence of compensatory damages and why this option is correct.