What actions could be considered payroll fraud?

Many people can get touchy when it comes to the subject of money. Unfortunately, this sensitivity often arises because of people’s past experiences with another person cheating them somehow. Typically, when a person is accused of a crime involving money and personal gain, he or she faces charges for a white collar crime.

You may know that white collar crime can refer to a number of activities. You may be interested in one in particular if you suddenly have allegations brought against you. For instance, you may have noticed some changes in your paycheck, but you didn’t think much about those changes because they worked in your favor. However, you may panic when someone accuses you of payroll fraud.

What is payroll fraud?

Payroll fraud is a type of white collar crime, and like other activities in this category, it involves using unlawful means to achieve financial gain. In particular, if someone accuses you of this type of fraud, he or she suspects that you have stolen money from a company through the payroll system. Some ways that this could occur include the following examples:

• Buddy punching: This activity involves an employee clocking in for a co-worker who may be out sick or who came in late so that the worker still gets paid even though he or she did not work those hours.
• Pay rate alterations: A worker could work with or coerce a payroll clerk to raise that worker’s pay so he or she earns more per hour.
• Unauthorized hours: This activity is similar to buddy punching in that it involves a person receiving pay for unworked hours. He or she may add hours to a timesheet to receive more pay.
• Unpaid advances: Some workers may request an advance on their paychecks and then simply not pay them back. This action constitutes payroll fraud.
• Ghost employees: A worker could also create a fake employee or use the name of an employee who recently left the company to make it appear that someone is receiving pay and actually having the pay directed to his or her own account.

These examples do not include every behavior that could potentially constitute payroll fraud.

Defending against allegations

Even if someone suspects that you have committed this type of crime, it does not mean you are guilty. You can take the time to defend against the charges brought against you in order to protect your reputation and work toward the best possible outcome. Reviewing your defense options may help you find your best course of action.