Payroll — falsified hours and pay rates

An employee overstates hours worked or raises a pay rate to increase pay for themselves or an accomplice. Variants include unearned overtime, overtime for exempt staff, unauthorized rate increases, and extra manual checks.

Fully covered.

Starter pack: Payroll review

Red flags

In the data

• Frequent or out-of-grade rate changes, or rate changes entered by the employee affected
• Overtime far above peers or for exempt employees
• Implausible hours (more than 24 in a day, long runs of very long days)
• Off-cycle or manual checks and multiple payments in one period
• Net pay that does not agree with a recomputation from gross pay and deductions

Behavioral

• Employee approves own time or overtime
• Payroll clerk works unusual hours around payroll processing

Internal controls

• Time can be changed after approval without a record
• Rate changes are not tied to approved personnel actions
• Payroll register is not reviewed against approved changes