Do Whistleblowers Get Compensated? Discover Key Benefits

Do whistleblowers get compensated? Learn about financial rewards, protections, and laws like the False Claims Act and Dodd-Frank Act that support whistleblowers.

Do Whistleblowers Get Compensated?

If sensitive information about misappropriated funds has come your way, you may be wondering what to do about it. Blowing the whistle is usually the right course of action for a number of reasons. Speaking up protects your reputation, company, taxpayer dollars, and the fairness of the American economy.

Becoming a whistleblower may seem like taking a big risk for a low reward, but the United States has instituted laws that help those who speak up about fraud recover substantial compensation. Areas like healthcare fraud, construction fraud, banking and securities fraud, education fraud, and government grant fraud are covered by powerful federal statutes like the False Claims Act and the Dodd-Frank Act. These laws allow whistleblowers to receive a portion of a successful settlement and protect them against employer retaliation through recovery of damages, back pay, and reinstatement. Speaking up is not only ethical but can be financially rewarding as well.

What Are Whistleblowers?

Whistleblowers are also known as “qui tam relators” in fraud recovery law. Whistleblowers bring a qui tam case on behalf of the federal government, i.e. the actual plaintiff or the defrauded party. In other words, whistleblowers act on the government’s behalf to help recover the stolen funds.

Typically, most whistleblowers work for the company they are reporting, though this is not always the case. Whistleblowers can be friends or family members who find out about sensitive information, or competitors seeking to make the bidding process more equitable. However, only one whistleblower (or group of relators) can be considered for a reward in a qui tam case. For this reason, it is important to be the first to share information through a whistleblower law firm to document your claim.

Do Whistleblowers Get Paid?

Whistleblower rewards are available for people who are the first to report previously undisclosed information that helps lead to a successful recovery of misappropriated funds. Under the False Claims Act, a whistleblower may receive anywhere from 15% to 30% of the total settlement if their information facilitates a successful one. If the government intervenes in the case, the whistleblower reward percentage can be anywhere from 15% to 25% of the total settlement. Because the False Claims Act involves individual penalties per false submission, as well as up to treble damages, this amount is often significant even in relatively small instances of fraud.

If the government declines to intervene, a qui tam lawyer can represent a whistleblower’s case on their behalf. If the case is successful without government aid, the relator share can be increased to 30% of the total settlement.

Whistleblower awards vary depending on a variety of factors. Whistleblowers who give valuable information, are early to speak up, and cooperate fully with the investigation are more likely to receive higher payouts. Whistleblowers who have some degree of culpability can still recover compensation, but their reward may be decreased.

What Are the Types of Whistleblower Awards? 

The following are some of the most common statutes governing qui tam whistleblower rewards:

• False Claims Act (FCA): The nation’s most powerful whistleblower reward and protection law, which can award 15% to 30% of a successful settlement. Violations must be “knowing” or in willful ignorance but do not have to involve the specific intent to defraud. Whistleblowers can also sue their employers if they are retaliated against in any way after a protected disclosure.
• Foreign Corrupt Practices Act (FCPA): International whistleblowers are especially valuable in blowing the whistle on bribery and corruption under this act. The FCPA makes it illegal to bribe foreign officials in order to further one’s business interests and can reward whistleblowers with 10% to 30% of the proceeds collected.
• IRS Whistleblower Award: Under this program, whistleblowers who provide information related to the evasion of tax payments receive a mandatory award of 15% to 30% of the proceeds collected by the IRS. To be eligible, however, the matter must involve at least $2 million in unpaid taxes and (if applicable) an individual with a gross income of at least $200,000. Providing information about shell companies, offshore accounts, foreign investments, and more can lead to a substantial reward for the person who comes forward under this tax law.
• Dodd-Frank Act: This act strengthened whistleblower potential for reporting securities and commodities fraud with the establishment of the U.S. Securities and Exchange Commission (SEC) and the Commodities Future Trading Commission (CFTC). Rewards range from 10% to 30% of the total amount collected, inclusive of fines and fees.
• Anti-Money Laundering Act (AML): Information about money laundering can net whistleblowers up to 30% of the final total sanctions.
• Act to Prevent Pollution from Ships (APPS): Whistleblowers who report certain kinds of ocean pollution, as well as false certifications of records and waste management practices, can receive up to 50% of the total monetary penalties imposed by the U.S. government.
• State False Claims Acts: Many states, most notably California, have robust FCA statutes. These state FCAs allow whistleblowers to bring lawsuits against entities that defraud state programs, including state Medicaid/Medicare fraud, school district fraud, university fraud, local business funding fraud, poor state infrastructure investments, and more. These types of fraud can be prosecuted through state laws as well as federal statutes, offering additional rewards and protections for whistleblowers. Some of the most common state FCAs involve protecting healthcare funds.

How Do I Apply For a Whistleblower Award? 

Applying for a whistleblower award depends upon the specifics of your information as well as the agency involved. For instance, to apply for the SEC whistleblower program or the CFTC whistleblower program, you will need to submit a tip or complaint to the Whistleblower Office via Form TCR and/or Form WB-APP. You may also be able to follow up once a Notice of Covered Action has been posted on the SEC Whistleblower website within 90 calendar days in order to claim a reward linked to your prior disclosure.

Working with a whistleblower attorney can help you make sure that you are including relevant information. They can handle the paperwork, help you meet deadlines, and maximize your relator’s share award percentage.

Important Things To Keep In Mind While Applying For a Whistleblower Award

The following are three crucial elements to consider when building your whistleblower claim for compensation:

1. Confidentiality: Anonymity, once gone, is gone forever. Working with a qui tam attorney means that your disclosures are protected through attorney-client privilege. You can protect your peace of mind as well as your professional reputation by reporting anonymously through a law firm.
2. Representation: Most state and federal courts recommend that whistleblowers work with legal representation in order to bring a qui tam claim. A qui tam lawyer makes sure that evidence is properly collected, your claim is supported by relevant statutes and case laws, and your disclosure is taken seriously by federal investigators from the start.
3. Deadlines: Once a Notice of Covered Action is posted, you have 90 days to claim your whistleblower payout through the SEC whistleblower program. Claims under the FCA must be filed either within six years of the fraud or within three years when the person responsible for acting with knowledge of the fraud either knew or reasonably should have known about it.

Can a Whistleblower Be Anonymous?

Yes. Reporting through a whistleblower law firm allows your name to remain off of the lawsuit and away from the investigation. Instead, the name of the firm will be used and your identity will be kept as private as possible.

Do International Whistleblowers Qualify For Compensation?

You do not have to be a U.S. citizen to be a whistleblower. Foreign nationals are equally eligible for reward under U.S. law. International whistleblowers may receive financial compensation under the FCPA, FCA, Dodd-Frank Act, and the IRS whistleblower program, among others.

Are Whistleblowers Protected From Retaliation? 

Whistleblowers have powerful protections against retaliation under U.S. law. Your employer cannot take adverse action against you because of your protected disclosure, such as by firing, demoting, failing to promote, harassing, abusing, or threatening you. If you suffer retaliatory action after becoming a whistleblower, you may be able to sue. Compensation can include double back pay, front pay, and reinstatement at the same seniority level.

Whistleblowers who have not yet spoken up, however, are not eligible for these legal protections. For this reason, among so many others, it is crucial to come forward as soon as possible to ensure you qualify as a protected whistleblower eligible for financial rewards.