Human Resource Blog

term due to travel expense violation

If fired due to fraudulant expense reports can a employer:

withhold pay
withhold vacation pay
withhold pension
withhold or effect 401(k)

As an employer, you would be terminating this employee for gross misconduct — specifically, for expense report fraud, which is basically stealing from the company. Under the law, you must pay the employee for the time that he or she worked, and that payment must occur on the next payday.

Vacation pay at termination is determined by state law and company policy. Some states such as Illinois and California always require that terminated employees be paid for unused vacation. In other states, it is a matter of company policy, and many times an employee fired for gross misconduct does not qualify for vacation pay at termination.

The pension will also depend upon company policy.

Any amount the employee has contributed to the 401k (plus gains or minus losses in investments) is his or hers. However, if the company provides matching funds or contributes to the 401k, company policy may deny those payments for theft or a similar serious violation.

Some employers would threaten to prosecute the employee for theft or fraud, especially if the amount of money involved is over $1,000. In that case, the employee and employer might reach an agreement where the amount is repaid by the employee, or deducted from the employees final paycheck, in return for a neutral reference or permitting the employee to draw unemployment benefits, or not prosecuting the employee.