What are the legal and ethical implications of "padding" pay with extra hours to compensate for unpaid work?

Question

I have come into a strange position and could greatly use some advice on how I should proceed. I am an undergraduate student at an American university in a computer engineering program. For the last several months, I have been hired as a student developer working for the university. However due to HR issues I have been working without any compensation. (I have so far worked over 300 hours for the university without pay.)

However last week they have finally got around to filling out the HR paperwork to officially hire me. My immediate boss feels bad about me working all this time and wants to "make it up". He has suggested doing this by going and "padding my pay" by a few hours each week until the time is covered. However I have been told to not let anyone else know or there will be trouble for it. This feels very shady and I am really struggling over whether this is something that is acceptable or not to do.

I know the thing that most people are likely to comment on is “Why the world did you not just quit?” The reason for this is really twofold. The position is a really nice one, I am able to be doing development work to help build up my resume and pay for school as a freshman student. The second being that I really do need the money from the position to help pay for school, and I was told throughout the entire process that I would start being payed “Just next week”.

I understand that they probably were just taking advantage of my ignorance (this is my first job), but has anyone ever had any experience like this where they can give advice on how I should proceed? (Or if the suggested method of padding hours is acceptable?) I’m told that “People do it all the time”, but also being told “don’t tell anyone” just makes it seem somewhat suspicious.

Any advice that could be provided would be greatly appreciated. (Particularly concerning the legality and ethics of the situation.)

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^{This question was originally posted on https://workplace.stackexchange.com/questions/78016/working-without-compensation-what-to-do but as they said academics tends to look differently on "under the table" dealings, they recommended I try to post it here for a better answers.}

Answer 1

Note that this answer is culture-dependant and my experiences will probably not fit directly with the situation in an American university, which you described to be enrolled in. However, the answer can help understand situations in which the described inofficial arrangements can work out, and also outlines why your situation is rather different from those.

As far as I know, it is very common to pad payment as described for smaller student jobs, so in the end the actual work hours and the actually received sum of payment match. Reasons include:

• University administration/HR departments tend to be (considerably) less spontaneous than what is sometimes required for fulfilling certain research-related tasks. This can become particularly discriminatory towards foreign students, as they might have to wait for documents from other agencies outside of the university (e.g. the agency responsible for foreigners in the respective jurisdiction).
• Workload created by ongoing research is by no means balanced in any way.
• The time available to students is not balanced in any way.
• In contrast to the two above points, student work contracts are often not sophisticated enough to account for that variation. They assume a uniform workload such as n hours a week.

Evidently, these issues can create a severe discrepancy between what is confirmed on paper (e.g. "4 hours a week for 3 months starting in July") and what both parties directly involved in the research want to agree upon to their mutual satisfaction (also with respect to not impeding the student's studying). Hence, it seems, distributing actual work hours differently to what the contract says is a way to counteract the negative effects of bureaucracy both towards research projects and the preferences of the people involved, and therefore not ethically problematic.

However, all of these arrangements usually work because they are conducted by people who responsibly handle the relatively large inofficial leeway. In your particular situation, I do see some warning signs that your superiors might not belong to that group, which indeed evokes the question “Why the world did you not just quit?” for me:

• There was no clear agreement between your superior and you about the inofficial arrangement before it started. It seems your superior 'feels bad about [you] working all this time and wants to "make it up"' as late as you have been working for a considerable number of hours.
• Your superior apparently did nothing to change things earlier. The contractual definition of work hours is, among other things, meant as a protection for the employee from negative side-effects (working too much; having too little time for studying; ...). It can seem justified to bend the rules for the reasons described above, but then the responsibility to protect the employee is passed on to the employer's "manual control". When they learn your officially paid hours are not just behind the actual working time by a week or two, but that no payment is in sight yet, it is up to your superior to tell you to pause working and to try and influence HR themselves.
• Rather than knowing more or less the deviation between what the contract says and what actually happens, you were repeatedly told you 'would start being payed “Just next week”'. While it may have been HR telling you that, this should have been another reason for your superior to suspend the inofficial arrangement for the time being, because obviously it cannot be implemented within parameters known to both of you (given that the parameter of how long you will actually have to wait was totally unknown).

As a final remark, you say you "have been told to not let anyone else know or there will be trouble for it". It is not quite clear how this request was phrased and what is meant by "trouble", or especially, who the "trouble" would be directed at. If this is meant to be "trouble" for you you are right to consider this quite shady, as apparently, your superior is not going to take responsibility for the arrangement¹ on the off-chance that anyone complains, and maybe also that the number of hours you amassed is substantial enough that someone might indeed bother to investigate.

¹: At the very least, by describing the arrangement as a way to retroactively make up for the due payment the student missed due to unforeseen administrative issues. IANAL, but while probably a violation of procedures of some kind, it seems unlikely anyone would bother to create consequences as there is no tangible damage if the student is paid for the worked time eventually.

Answer 2

I am not a lawyer, but maybe you can ask them if it would be possible for them to provide you with a contract which back-dates your starting date to when you actually started?

I would prefer this approach because then you can list the correct, longer time range during which you worked for them on your CV without worries because you can prove it with your contract (and probably also in their files).

Also, it could be that there are certain rules that forbid students to work more than X hours a week which, if surpassed, may have consequences in terms of taxation/visa/whatever. Sticking to the truth (in this case backdating) can avoid those problems.

I worked a few times as teaching assistant at my university. Usually I got to sign my contract in time before the starting date, but one time the personnel drafting the contracts were overloaded with work, so I started working without a contract. About a month later they finally had created my contract. The starting date indicated was from a month before (i.e. it was correct); I put my signature and the then-current date (i.e. a month later) under it. Had no problems, they registered it correctly at the tax office and the next month I received two months of salary at once.

Generally, I wouldn't recommend working with only the promise of a contract. Luckily, in my case (and as it seems, in your case), it turned out well and promises were honored. Also, I only did it because trust had been earned earlier.

Answer 3

I have no clear answer -- but you certainly can't get into trouble for working without pay. Your supervisor and the school might, but not you. That's probably why they prefer you not discuss that.

As for padding your pay -- this may be the right thing for your supervisor to offer, but it doesn't seem legal (I'm no lawyer) -- and if it isn't, you'd be complicit.

I'd be tempted to say just take your lumps, and work your future hours for compensation.

You might have a chat about receiving independent study credit for the free work you did, either in the current semester or a future semester, with all involved understanding when the work took place

Answer 4

I am not a lawyer.

However, the Federal Fair Labor Standards act dictates that they must pay you for your work under various circumstances. In general, if they derived a benefit from your work and you working for them was not a detriment or net cost to them in some way, then you should be paid for it. You do have the responsibility to prove in some way that you worked the hours claimed. This can be a letter from your boss backing up your claim or detailed documentation of the hours and days you worked.

The "right thing to do" is to have your boss file a request with HR to provide you with back pay based on the hours you worked. It should all come in a lump sum and include all the proper deductions.

If your boss is not willing to do the right thing and file this request, or HR is unwilling to fulfill the request, then the next best thing is to get a letter from your boss stating the hours you worked and go talk to HR personally. Remind them of their liability under the FLSA and request that they rectify the situation. If they still won't budge then you need to decide whether it is in your best interests to sue them for the back pay. Assuming you have a letter from your boss stating you worked those hours, you should have no issue winning the lawsuit. Technically, they are also not allowed to fire you for doing so. This type of retaliatory behavior is strictly prohibited by law and could entitle you to further damages. However, if you have to sue them for pay you rightfully earned just to get them to pay you, you should seriously question whether they are someone you want to continue to work for.

In the future, always keep your own personal detailed records of every hour your work, including the date and the times during the day you performed the work. I'm sure there's probably an app for that.

That's my 2 cents on this issue.

Answer 5

I can tell you, that this is very common practice in Germany, a sort of open secret. At my university at least. I've done it myself and I know many people who've done it. Although the cases I know of were not as extreme (i.e. 300 hours of advance work), I wouldn't have any qualms accepting your supervisors offer.

I'm also not sure I agree with other answers on this being a disadvantage as far as your CV is concerned. I presume the amount of time you're going to spend on the job in total will not be affected, right?

Don't tell anyone you don't trust, though. Or, better yet, don't tell anyone at all. And also the situation in your country might be different.

EDIT:

I got @JosefStark's CV remark: the padded contract might squeeze the total hours into fewer months, that is of course correct.

Answer 6

I'm not a lawyer, so don't take this as legal advice.

First, tell your boss you're not okay with padding your hours unless you get something in writing from HR. You shouldn't take on that sort of risk.

Second, did you get some sort of job offer stating the terms of your work? Does it mention a start date and pay? If yes, it seems like you would be on pretty good grounds. If no, you may be in a difficult spot.

Either way, I would probably go to HR. They certainly don't want to end up with lawyers involved, and neither do you, so I would think everyone would be motivated to talk about this. Most places have pretty strict laws about employee compensation. The only catch is if the job is worth it for the experience, and you would rather write off the earnings to this point than jeopardize your position going forward. In that case write it off as an internship or unpaid research assistantship, and talk to your boss about labeling it as such.

Answer 7

Everyone who fills in their own timesheet has wiggle room. What matters is the perception and satisfaction of the supervisor who signs off on it. If he's happy with the situation, it's good. Labor law does not and cannot capture the nuance of this.

My realpolitik perspective is that, as long as you aren't actually being taken advantage of (i.e. you get paid), bringing it to HR is just causing a problem over nothing. That could hurt you as it will cause you to be perceived (say, by your current supervisor) as a stickler.

This isn't legal advice and all that, but I can't see any way this could hurt you. Just don't cop to it, especially in writing.

(As an addendum. I have worked a variety of hourly positions. I have seen people come in and do nothing for 6 hours, write down 8 and call it a day. I have seen workers who are only allowed to bill 8 hours a day but work 12, whether by tacit expectation or otherwise.

It is completely absurd and laughable to me that there would be anything like an investigation, or that someone would call him on it. Quite simply, it would be fundamentally impossible to pursue.)

Answer 8

You're not padding your pay with hours that you didn't work; you're just being paid for hours that you DID work, albeit at a different time.

Answer 9

Many places of employment have either an official or an informal system of "flex time". Initially I believe it meant that you could work 6 hours one day and 10 hours another day, since it would even out in the wash. But in a community college where I worked, full time in the IT department, it meant I was able to put extra hours into my flextime bank over the course of several months, by working more than 40 hours in the week, and then take hours out (by working less than 40 hours) when I took some college courses in the summer term and needed time to go to class and do homework. Each employee in the department kept track of their hours by just jotting them down. I kept a separate notebook just for that in my top desk drawer. My immediate supervisor shared an office with me, and there was an atmosphere of complete trust.

On the other hand, sometimes a freelance worker is hired for a particular project, and is asked to keep track of his total hours worked. In essence he will get paid for the total number of hours needed for the project, but he may be asked to invoice his hours in a more evenly spread-out pattern than the actual distribution of hours as he puts them in.

What your boss has proposed could potentially fit under either of these schemes.

Note that in an academic setting, things are sometimes more loosey-goosey than in non-academic workplaces.

If your boss has asked you to be discreet, I would honor this request, since he's the one who's going to be signing your timesheets.

Based on multiple personal work experiences with both of the schemes I described, I really don't think you have anything to be concerned about. However, to be sure, you could anonymously call the government employment office in your area. Where I live these offices are called "Workforce New York".

Answer 10

This can go two ways:

1. Nobody notices, or they notice but nobody minds. You get the money.
2. Somebody notices, and it turns out your boss: had no authority to hire you for the work without approval; worst case would never have got permission to hire you for the original work; therefore has chosen to knowingly defraud the University in order to "Robin Hood" you the money. You're both involved in criminal fraud to the tune of 300 hours of pay. Perhaps your boss even denies ever having had this conversation with you, in the hope you'll go down for it alone.

So the worst-case potential downside is prison. Probably the money's not worth the risk, but your call.

Even if the worst case doesn't materialise, your boss is saying that if you tell anyone there will be Trouble. This strongly suggests that if you don't tell anyone but they find out anyway, then there will likewise be Trouble. So what's the chance of getting caught padding 300 hours? Depends how long you pad them over, whethe the timesheets you submit are plausible, and whether anyone is auditing any of this.

So granted, the worst case is unlikely, and other people are working around the bureaucracy in similar ways. Still, you want to avoid doing anything shady, and this is shady because the people paying the money aren't being told what it was for. That justifies pressing your boss to admit to HR and his boss that he was slack about the paperwork, and request that you be paid for all or some of the work you've already done. It's much better to submit a truthful invoice for the work you've done, than a bunch of false timesheets for which you can be held liable, maybe even years from now. If the University refuses to pay the invoice on grounds all you had was a verbal agreement with your immediate boss, you can either let it go or you can explore other options to demand payment.

If all that's going on here is your boss doesn't want to have to confess to being badly-organized, then it might not even be that difficult to convince him to face the music rather than do something that probably isn't legal even if it does "come out the same in the end". Really depends on his personality and the consequences for him of anyone finding out what he already did wrong (strung you along for 300 hours of unauthorised work). If he's already committed a sacking offence then you can only choose two of getting paid, staying legal, and continuing to work for him. You couldn't have all three. If he's merely at risk of looking like a buffoon and getting frowned at then maybe once pressed he'll be willing to do that in preference to involving you in something you're not happy with, and you get all three.

Answer 11

IANAL.

This might be typical for more limited circumstances: say, you started work a week before the paperwork went through, and you have a limited part time 5 hr/week student research job, adding those hours to your first week of work wouldn't be legal but it is very unlikely to lead to consequences for anybody.

Your circumstance is way beyond that, but it really sounds like the person likely to be in trouble would be your boss, and not you, assuming it would be clear to anyone that your boss knows how many current hours you are actually working (i.e., if they are always in the lab when you are).

Answer 12

If you do it then for sure you need to not tell anyone. If you keep it just between you and your supervisor then you could probably get away with it.

The problem is that slight chance you don't get away with it. You would likely get kicked out of school, possible criminal charges, and they may ask for the money back. If your supervisor fessed up and said he was in on it then not likely they would file criminal charges but if he throws you under the bus then you could be facing criminal charges.

Ask for another way to make up for that time.