Source: https://freedhoward.com/can-i-sue-my-employees-for-padding-their-timesheets/
Timestamp: 2019-04-26 04:14:27+00:00

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Can I Sue My Employees For Padding Their Timesheets?
Brown v. State of Georgia – Racketeering conviction upheld for employee’s systematic falsification of time sheets and kickbacks.
United States v. Walsh – Employee of county sheriff’s office indicted for overstating regular and overtime hours worked on timesheets.
United States v. Lynette Jackson – NSA contractor pled guilty for submitting false timesheets.
Schroeder v. United States – False Claims Act suit filed against CH2M Hill based on widespread employee billing fraud.
Prevents employers from retaliating against employees who claim that they have not been paid all of the wages they are owed.
Make sure that your policies explicitly require employees to be truthful in the entry of time, and do not allow any estimations.
Assume an employee claims to have worked 60 hours one week, but the employer believes they only worked 45. If the employer refuses to pay for the extra 15 hours of overtime, the employee may file a lawsuit under the FLSA for two times their alleged back wages plus their attorney’s fees and costs of court. If the employer counterclaims for wage theft, fraud, and abusive litigation, the employee will likely claim that this constitutes illegal “retaliation” for their exercise of legitimate legal rights under the FLSA. The legitimacy of the retaliation claim depends entirely upon the legitimacy of the wage theft and fraud counterclaims.
Based on the results of the investigation, management found that 184 hours of Plaintiff’s on-call time for this period could not be confirmed when checked against company cell phone records. Accredo concluded that Plaintiff had falsified her time entries. This is obviously a legitimate basis for ending Plaintiff’s employment. “Fraud and dishonesty constitute lawful, non-retaliatory bases for termination.” The Court holds then that Accredo has carried its burden to produce a legitimate, non-FMLA reason for Plaintiff’s termination.
Ahle v. Veracity Research Co., 641 F. Supp. 2d 857, 863–64 (D. Minn. 2009) (in an FLSA case, ruling that the Court would allow “counterclaims for breach of the duty of loyalty and honesty, forfeiture or disgorgement, intentional misrepresentation, and negligent misrepresentation” based on false timesheets).
Nickle v. Astramed Physician, P. C., 2013 WL 782370, at *3–4 (E.D.N.Y. Feb.28, 2013) (permitting fraud counterclaim in FLSA case where defendant alleged that plaintiff did not actually work the hours he reported).
Cordero v. Voltaire, LLC, No. A-13-CA-253-LY, 2013 WL 6415667, at *4 (W.D. Tex. Dec. 6, 2013) (recommending that “the District Court deny Plaintiff Cordero’s Motion to Dismiss Defendant’s fraud counterclaim” in an FLSA action).
Rogers v. Harper Vehicles, LLC, 2006 WL 2708322, at * 1 (E.D.Tenn. Sept. 19, 2006) (fraud counterclaim permitted in case where the plaintiff was allegedly “‘padding’ her time and falsifying her time records which resulted in her being paid for time that she did not actually work”).
Lombardi v. City of Cornersville, Tenn., 2007 WL 190324, at *1-2 (M .D.Tenn. Jan. 22, 2007) (court allowed defendant’s counterclaim that plaintiff wrongfully appropriated “funds, bonuses and wages to which he was not entitled” by padding timesheets).
Herbst v. Ressler & Assocs., Inc., No. 4:13-CV-2327 CAS, 2014 WL 4205294, at *4 (E.D. Mo. Aug. 22, 2014) (allowing fraud and theft counterclaims in an FLSA suit becasue, “[t]o the extent Ressler’s fraud counterclaim alleges that it is entitled to recover compensation it paid to plaintiff for time he claimed he was working for Ressler but actually was not, the counterclaim raises similar factual and legal issues to the FLSA claim as both require a determination whether plaintiff actually worked when he claimed to have worked, and what he was paid”).
Notably, not every fraud counterclaim related to the plaintiff’s employment will be allowed in an FLSA case. In misclassification cases, in which the plaintiff claims to have been misclassified as an independent contractor in order to avoid the FLSA’s overtime requirement, employers have attempted (with varying degrees of success) to counterclaim based on the employee’s “fraudulent inducement” of the independent contractor agreement.
Ruffin v. Entm’t of the E. Panhandle, 845 F. Supp. 2d 762, 770 (N.D.W. Va. 2011) (dismissing counterclaim that the plaintiff defrauded the employer into treating her as an independent contractor by signing the independent contractor agreement with the intention to file an FLSA misclassification lawsuit later).
McFeeley v. Jackson St. Entm’t, LLC, No. CIV.A. DKC 12-1019, 2012 WL 5928769, at *5 (D. Md. Nov. 26, 2012) (dismissing fraud counterclaim in misclassification suit based on the allegations that “Plaintiffs intended to receive the benefits of independent-contractor status before repudiating that status and claiming in this lawsuit to be employees”).
The take-home message for employers is that they have remedies for timesheet fraud even if they have already been sued under the FLSA, but the employer’s claims should be related to the employee’s wages and hours, and should not seek to recover so much in damages that the employee’s pay rate would be reduced below minimum wage for any given pay period.
If you would like assistance evaluating your obligations to, or rights against your employees under the FLSA, please feel free to call (404.849.0394) or write (beau@freedhoward.com). We will be glad to provide a preliminary consultation without charge.
Where Is My Class Action Waiver Enforceable?
I’m contractor working overseas and get paid a daily rate. We do not get paid on our day off. My typical shift is 11-12hrs which sometimes fall into my day off, which I have consistently worked 1-5hrs into. My company states it’s based on shift hours worked and not a “midnight to midnight” daily rate. But on my timesheet I have to log 0hrs worked on my day off, but when in fact I worked 1-5hrs into it. Is it legal for them to do this?
Gideon, we don’t normally give specific legal advice on the blog, and your question may be more complicated than it seems based on the fact that you are not working in the USA, and you say you are a contractor as opposed to an employee. Our firm generally represents businesses in labor and employment matters, and the L&E world is one where attorneys will mostly pick a side and stick to it. That said, you should consult with an attorney who practices on the employee’s side of the L&E bar if you feel that your rights are being violated. Employee-side L&E attorneys in the USA generally do not charge for consults, which is a plus. Good luck!

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