Whistleblower Rewards

Authored by , LegalMatch Legal Writer and Attorney at Law

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Most Common Employment Law Issues:

Are Whistleblowers Awarded for Reporting Violations of the Law?

The False Claims Act, often referred to as the "Lincoln Law," allows whistleblowers to be awarded a percentage of the money that the government recovers from its lawsuit against the employer. The section of the law that allocates a portion of the award to the reporting party was created to encourage people to assist the government in stopping fraud on Medicare and other governmental programs, despite the effect whistleblowing may have on a that individual's job and personal life. If the employer fires the whistleblower unfairly as a result of their actions, the whistleblower can sue the employer separately for reinstatement, legal fees, and their lost wages.

How Much Can a Whistleblower Be Awarded?

A whistleblower can receive 10 to 30 percent of funds collected by government as a result of their investigation. Ultimately, it will depend on the type of case. For instance, if the case involved the Internal Revenue Service (IRS) and the total amount of taxes and penalties exceeds $2 million, the whistleblower can expect between 15 and 30 percent. Under an investigation conducted by the Securities and Exchange Commission (SEC), the whistleblower can expect 10 to 30 percent, assuming the investigation in question exceeds $1 million in sanctions.

In all cases, the government will compensate the whistleblower for legal fees.

What Happens If the Employer or Government Settle the Lawsuit?

If the employer decides to settle their fraud dispute with the government, the whistleblower will likely receive a smaller percentage of the recovered amount. While the award is smaller, the whistleblower will receive that pay out much faster than waiting years for a trial. 

When Should an Employee Raise a Whistleblower Claim?

If an employee discovers that their employer is overcharging or otherwise defrauding the government, they should consider raising a claim as quickly as possible. Raising a whistleblower claim after the public becomes aware of the problem will likely result in the claim being denied. Therefore, reporting the matter only to an attorney or government official shortly after the issue is discovered is the best way to secure a claim.

Should I Hire a Lawyer?  

Accusing your employer of fraud against the government is a very serious charge that can lead to a great deal of stress in your life. The reward of a successful whistleblower lawsuit can make this a worthy risk, but an allegation alone will subject your employer to a government investigation that you will not be able to stop even if you drop your lawsuit. It would be wise to consider consulting with an employment attorney to learn more about your rights, the consequences of filing suit, and the rewards you can expect if the suit is successful.

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Last Modified: 07-08-2014 11:59 AM PDT

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