What is the effect of compensatory damages awarded in employment lawsuits?

Compensatory damages awarded in employment lawsuits are primarily designed to make employees whole by compensating them for losses they have suffered due to unlawful employment practices. This might include back pay for lost wages, lost benefits, and emotional distress damages that have occurred as a result of the employer’s wrongful actions. The goal is to restore the employee to the position they would have been in had the discriminatory or illegal conduct not occurred.

The rationale behind compensatory damages is to address the direct financial impact of the wrongful employment practice on the individual, thus acknowledging their loss and seeking to remedy it through financial compensation. This approach emphasizes fairness and accountability within the workplace by ensuring that employees are not unjustly disadvantaged due to employer misconduct.