Introduction: The Myth of Fraud in Recreated Payroll Records

In the aftermath of workplace disputes, particularly those involving whistleblowers, discrimination complaints, or contested separations, it is not uncommon for employers to weaponize administrative gaps against employees. A particularly pernicious tactic is the post hoc framing of reconstructed payroll records as evidence of “fraud.” The underlying insinuation is simple but deeply flawed: if a time slip is missing, if a payment code was corrected, or if a record was recreated after the fact, the employee must be lying. But this narrative not only misrepresents the law—it inverts it.

Under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL), the employer, not the employee, bears the legal burden of maintaining accurate payroll records. When an employer fails, courts have long recognized the employee’s right to reconstruct their hours, supported by testimony, approximation, or indirect evidence. These protections are not loopholes—they are foundational rights meant to counterbalance the power imbalance between employers and employees, and to prevent unscrupulous actors from hiding behind their noncompliance.

This article addresses the escalating and deeply problematic misuse of the term “fraud” in employment settings, particularly by public employers, internal and external investigators, and legal departments unfamiliar with or willfully indifferent to established wage-and-hour jurisprudence under the FLSA and New York Labor Law. Increasingly, employees are being falsely accused of fraudulent conduct merely for submitting reconstructed payroll records, even when those records were created by supervisors or in response to the employer’s systemic failures.

Such accusations not only misstate the law, they invert it. Under well-settled precedent, it is the employer’s legal duty to maintain complete, contemporaneous payroll records. When employers fail that duty, courts have explicitly authorized employees to reconstruct hours through good-faith testimony, approximation, or corroborating evidence. This article seeks to clarify those legal standards, inform employees and the public, and expose how employer negligence, not employee conduct, is the true source of payroll uncertainty. The act of reconstruction is not evidence of deceit. It is often the only legally permissible response to an employer’s longstanding recordkeeping deficiencies.

I. The Legal Burden Lies with the Employer—Not the Employee

At the foundation of every wage-and-hour dispute lies a simple but often misunderstood legal principle: the employer, not the employee, bears the burden of maintaining accurate payroll records. This is not a technicality. It is a statutory command rooted in decades of jurisprudence and public policy, designed to prevent precisely disputes arising when employers fail to do their part.

Under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 211(c), and its implementing regulations (29 C.F.R. § 516 et seq.), employers are required to “make, keep, and preserve” detailed records of employees’ wages, hours worked, and other terms of employment. This obligation is not discretionary nor subject to waiver by the employee. It is a non-delegable duty grounded in the recognition that employers control the systems, direct the timekeeping mechanisms, and supervise the daily functions of the workplace.

New York’s Labor Law mirrors this framework. Section 195(4) of the New York Labor Law, together with 12 NYCRR § 142-2.6, mandates that employers “establish, maintain and preserve for not less than six years” weekly records that include:

• The hours employees worked;

• The wages paid to them.

• All deductions taken; and

• Underlying payroll schedules, notes, and supporting documentation.

This statutory structure reflects an important truth: employees are not bookkeepers. They do not control the payroll software, set pay codes, or determine whether time entries are accepted or flagged. Particularly in public employment settings—such as police departments, hospitals, and transit authorities—employees are often directed by supervisors to submit hours a particular way, or to follow informal but institutionalized procedures that diverge from official policy. The idea that an employee should be penalized or criminalized for following managerial direction is unjust and legally indefensible in these contexts.

The courts have long understood this asymmetry of power and information. In Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946), the United States Supreme Court held that where an employer fails to maintain proper records, the employee may meet their burden of proof “if he produces sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference.” This evidence may include estimates, memory, testimony, or reconstructed documents. Once the employee meets this threshold, the burden shifts to the employer to produce precise records rebutting the claim. If they cannot, the court may accept the employee’s approximation as a matter of law.

This doctrine is not limited to federal courts. In Matter of Mid Hudson Pam Corp. v. Hartnett, 156 A.D.2d 818 (3d Dep’t 1989), the Appellate Division explicitly adopted this standard, holding that “[a]ny inexactitude in the computation of wages due should be resolved against the employer whose failure to keep adequate records made the problem possible.” The message is unequivocal: the law will not allow employers to benefit from their noncompliance.

Thus, recreated records submitted without employer-maintained documentation are not fraudulent. They are the legal remedy the courts have authorized to address employer failure. Treating an employee’s good-faith attempt to reconstruct their hours, particularly when guided or approved by supervisors, as presumptive evidence of deception is to invert the burden of proof, violating both statutory and constitutional principles of fairness.

This misapplication is not merely a legal error. It reflects a broader cultural and institutional problem: the tendency of employers and investigators—especially in public sector environments—to weaponize process against employees, often in retaliation for protected disclosures or to shield internal dysfunction. The law, however, remains clear: the employer must keep records. The employee may reconstruct them. Anything less undermines not only wage protections but also the foundational logic of modern labor law.

II. Recreated Records Are a Legally Accepted Form of Proof—Not Evidence of Fraud

The conflation of reconstructed records with fraud reflects a profound misreading of both statutory wage law and evidentiary standards. This confusion is not merely academic—it has real consequences. Employees, particularly those in public service or institutional settings, are increasingly accused of misconduct based on nothing more than the retroactive creation of timekeeping records that their employers failed to maintain in the first place. This is not only wrong—it is unlawful.

Under the FLSA and the NYLL, employees can reconstruct their work time based on a reasonable approximation of when an employer has failed its recordkeeping obligations. This principle is foundational. As the Supreme Court made clear in Anderson, reconstructed or estimated time entries are not just tolerated—they are the authorized evidentiary substitute in the face of employer default. The law recognizes that employees cannot be expected to produce contemporaneous proof of every minute worked when the employer has abdicated its duty to track it.

Notably, courts have not required that reconstructed records take any specific form. They may consist of:

• Testimony based on memory;

• Calendar notations;

• Copies of prior timesheets;

• Emails, text messages, or call logs indicating work performed;

• Affidavits describing patterns or routines; or

• Handwritten reconstructions of hours worked, whether drafted by the employee or manager.

Nowhere in this legal framework is there a basis for assuming that such documents are “fraudulent” simply because they were created retroactively.

To the contrary, using reconstructed records becomes legally necessary once an employer fails to preserve primary documentation. Courts throughout New York and federal circuits have emphasized this dynamic: the employer’s noncompliance triggers the employee’s right to supplement the record. As the Second Circuit noted in Grochowski v. Phoenix Construction, 318 F.3d 80 (2d Cir. 2003), employees need not prove their hours with mathematical precision. The court must make “a just and reasonable inference,” particularly when the employer’s conduct necessitated the reconstruction.

In New York, this principle has been echoed in administrative and appellate forums. In Mid Hudson Pam, the court reinforced that reconstructed records were not only permissible but required when the employer failed to discharge its statutory recordkeeping responsibilities. To call such documentation “fraudulent” in this context is not only inaccurate—it’s a perversion of governing law.

This legal framework becomes especially relevant in institutional environments where informal timekeeping practices are common. In many police departments, hospitals, schools, and other bureaucracies, it is well known that payroll documentation may be delayed, verbal, or paper-based. Supervisors may instruct employees to “write it in later,” “copy it from the calendar,” or submit missing slips afterward. These practices are endemic, not deviant.

In such environments, the employee is not forging documents but following an unwritten but institutionalized protocol. The employer’s failure to modernize, automate, or enforce uniform documentation procedures creates the need and expectation that employees will rely on after-the-fact corrections or reconstructions. When a manager tells an employee to recreate a lost or never-filed timesheet and then later accuses that employee of fraud for doing so, it is not the employee who has acted improperly—it is the employer who has weaponized its own dysfunction.

Even more troubling is when such accusations are deployed selectively, often after the employee has engaged in protected conduct such as whistleblowing, filing complaints, or refusing unlawful directives. Investigators who interpret reconstructed records as “evidence of fraud” without considering the employer’s recordkeeping failures or the institutional context are not conducting a neutral inquiry—they are advancing a retaliatory narrative under the guise of compliance.

Fraud, in both civil and criminal law, requires intent to deceive. It does not mean “late,” “recreated,” or “based on memory.” It means knowing falsification with intent to mislead for personal gain. When employees attempt in good faith to reconstruct time worked due to employer error, they are exercising a legal right, not committing an offense. The real violation lies in accusing them otherwise.

III. Following a Supervisor’s Directive to Recreate Time Records Is Not Fraud

One of the most troubling developments in wage-and-hour enforcement, particularly within law enforcement, healthcare, and public employment settings, is the weaponization of employee compliance. Internal investigators and legal departments increasingly mischaracterize ordinary, supervisor-sanctioned timekeeping corrections as fraudulent conduct. This defies legal precedent and disregards the basic principles of managerial authority, workplace discipline, and due process.

In hierarchical workplaces, employees are not autonomous agents—they are subordinates. They follow instructions from supervisors who control access to schedules, timekeeping systems, payroll submissions, and final approvals. When a supervisor instructs an employee to recreate a payroll slip, submit a missing form, or replicate prior entries due to departmental backlog or missing documentation, the employee is not engaged in deception—they are complying with direction. Retroactively accusing them of “fraud” for executing those orders is irrational and legally indefensible.

Courts and wage authorities have addressed this precise issue across jurisdictions. In Anderson, the U.S. Supreme Court emphasized that the employer’s structure, not the employee’s submission, governs compliance with wage-and-hour laws. If the employer has created an informal or decentralized timekeeping process—and has not objected to reconstructed or post hoc entries—the burden lies with them to correct it. Punishing employees after the fact for complying with longstanding practices is not enforcement—it is entrapment.

Moreover, the law presumes acquiescence in workplaces where the employer has maintained a culture of tolerating or even encouraging delayed payroll submissions. The employer cannot allow such practices for years and then claim they constitute “fraud” when applied selectively to disfavored employees. Courts have recognized this form of selective discipline as strong evidence of pretext, especially where there is temporal proximity to protected activity such as filing a complaint, seeking an accommodation, or engaging in whistleblowing.

The New York Appellate Division addressed a similar issue in Mid Hudson Pam, where the employer’s failure to maintain clear and consistent records disqualified it from discrediting the employees’ reconstructed time. The case affirmed a basic principle: when institutional practices fail, employees cannot be punished for navigating those practices in good faith.

Intent matters. Fraud requires knowingly misrepresenting oneself to deceive the employer for unlawful personal gain. But when an employee acts at the direction of a supervisor, relies on the employer’s longstanding policies, or mirrors the conduct of similarly situated employees, fraudulent intent is not just absent—it is legally implausible.

This issue becomes especially pronounced in organizations where supervisory staff are pressured to meet budget, overtime, or staffing metrics. In such cases, employees do not make payroll decisions unilaterally—they are the product of command-level determinations about resource allocation, operational necessity, or political optics. To hold an employee accountable for following orders under these conditions—especially when similarly situated employees are not disciplined—raises not only concerns about fairness but also potential liability under anti-discrimination and anti-retaliation statutes.

Internal and external investigators must understand that fraud is a conclusion, not an assumption. It cannot be inferred merely because a document was submitted late, recreated from memory, or written by hand. It must be proven through clear evidence of intent to deceive. Without that intent, and especially in the context of managerial instruction, the proper legal characterization is compliance, not misconduct.

Finally, there are broader policy implications. If public employers want employees to adhere to strict timekeeping protocols, they must ensure that such systems are accessible, enforced, and supported through adequate training. Where employers fail to meet this baseline obligation, it is not only wrong—it is unlawful—to punish employees for working within the flawed systems they were given.

IV. Recreated Payroll Records Are a Legally Recognized Form of Evidence—Not a Presumption of Guilt

One of the most pervasive myths in wage enforcement—especially among institutional investigators unfamiliar with wage-and-hour doctrine—is that any form of recreated or reconstructed payroll record is inherently suspect. This is not only false, but it also reflects a dangerous misunderstanding of both federal and state law.

In both the public and private sectors, courts have repeatedly upheld the use of recreated payroll records when an employer fails to meet its statutory obligation to maintain adequate documentation. Far from being seen as “red flags” for fraud, these records are often the only lawful mechanism for employees seeking to demonstrate hours worked and wages owed. In such cases, reconstructed records are not only permissible but essential to the administration of justice.

Under the Fair Labor Standards Act (FLSA) and its state analogues, the evidentiary burden shifts in favor of the employee once the employer fails to produce reliable payroll data. The Supreme Court’s decision in Anderson remains the governing framework. There, the Court held that employees “carrying out their duties under conditions where the employer’s records are inadequate or nonexistent” may satisfy their burden through “just and reasonable inference.” This can include oral testimony, estimates, notes, calendars, or other good-faith documentation. The employer then bears the burden of rebuttal with accurate records.

Likewise, New York courts, including in Mid Hudson Pam, have affirmed that employer recordkeeping failures open the door for employees to present alternative proof, whether drawn from memory, contemporaneous notes, or reconstructed logs. The courts emphasized that any “inexactitude” resulting from the employer’s statutory breach must be resolved in favor of the employee. To hold otherwise would perversely reward the employer’s noncompliance and frustrate the remedial purpose of wage-and-hour laws.

Recreated records become particularly relevant in sectors with complex timekeeping structures—such as law enforcement, healthcare, construction, or shift-based labor—where time cards are sometimes retroactively filled out due to operational needs, supervisory requests, or technological failures. Investigators who treat such retroactive entries as prima facie fraud risk violating both legal standards and employee rights.

Indeed, investigators have an affirmative duty to distinguish between:

• Good-faith approximations or reconstructions, made due to missing slips, lost data, or supervisor instruction; and

• Intentional falsification for personal enrichment may meet the threshold of fraud.

The former is not only legally permissible—it is lawfully anticipated in any case where an employer has failed to maintain adequate documentation. The latter, by contrast, requires proof of scienter: knowledge and intent to deceive.

Too often, however, internal audits and administrative inquiries collapse this distinction. They treat the absence of a physical time slip—often lost due to no fault of the employee—as a presumption of wrongdoing. They ignore that many timekeeping systems operate without consistent documentation, and supervisors often reconstruct schedules or approve hours retroactively. Worse, they selectively enforce discipline against disfavored employees—often after protected conduct such as whistleblowing, EEO complaints, or union activity—thereby transforming a recordkeeping issue into a tool of retaliation.

It is not enough for employers or investigators to say that a record is “missing.” They must ask why it is missing, who was responsible for maintaining it, whether that omission reflects a systemic failure, and whether the employee had any meaningful control over the documentation process. In most cases, the employer—not the employee—owns the system, the standards, and the records. If the system is broken, the burden of that failure cannot lawfully fall on the employee.

Nor can a public agency punish an employee for relying on the norms the agency has historically tolerated. If payroll documents are routinely reconstructed, manually submitted, or corrected by supervisors without repercussion, then recreated records cannot suddenly become the basis for selective disciplinary action. To do so is not only unfair—it is a form of legal pretext.

Ultimately, recreated payroll records are not evidence of guilt. They are evidence of an employee trying to comply with the law under imperfect conditions. Courts understand this, and ethical investigators should, too.

V. Managerial Directives and Customary Practices Cannot Be Retroactively Criminalized

In workplace investigations—particularly in public employment settings like law enforcement or government agencies—there is a recurring, deeply troubling pattern: employees who follow longstanding, managerial instructions regarding timekeeping are later accused of “fraud” or “misrepresentation” when political or institutional incentives shift. This post hoc reinterpretation of administrative norms into disciplinary violations is not just unjust but legally unsustainable.

At the heart of many clawback efforts and fraud allegations lies a basic distortion: the idea that an employee who complies with supervisory instructions regarding payroll submission is somehow complicit in deception. This view ignores the hierarchical nature of employment relationships and the legal principles that insulate employees from liability for conduct directed—or ratified—by their employer.

Under federal and New York law, the employer—not the employee—is responsible for establishing lawful payroll practices. This includes setting timekeeping protocols, training personnel, supervising compliance, and correcting deficiencies. When supervisors instruct employees to submit time retroactively, omit entries from an electronic system (e.g., CityTime), or use manual processes instead of digital ones, the legal consequences of that arrangement fall squarely on the employer.

This principle is reflected not only in wage-and-hour case law but also in broader doctrines of employment law. Courts recognize that employees are not expected to challenge or second-guess supervisory instructions, especially when those instructions reflect longstanding, department-wide norms. If the practice is known, permitted, and unchallenged by management, it cannot later be recharacterized as misconduct by subordinates who had no power to change it.

For example, in Mid Hudson Pam, the Appellate Division refused to penalize employees for wage deficiencies traceable to employer recordkeeping failures. The court emphasized that employers cannot both control payroll systems and evade liability for their flaws. Similarly, in Anderson, the Supreme Court underscored that when an employer fails to provide a reliable method of recording time, an employee’s estimate—however rough—must be credited.

These rulings illustrate a core point: an employee’s reliance on flawed or informal procedures—if created or condoned by management—is not fraud. It is compliance under constraint. Any institutional effort to treat such conduct as a disciplinary or criminal violation must be scrutinized for retaliatory motive.

The risk of retaliatory misuse is especially acute where protected activity—such as reporting harassment, discrimination, or corruption—is involved. Agencies may seek to create a “pretextual” basis for discipline, seizing on minor administrative irregularities as cover for reprisal. In such cases, even mundane practices—like submitting a manually signed overtime form after a shift—are recast as deliberate falsifications. But this recharacterization is legally fraught. Courts have long held that proximity between protected activity and adverse action, especially where the alleged infraction was tolerated beforehand, leads to an inference of retaliation.

Investigators and legal departments must also be mindful of customary practice as a defense. In civil litigation and administrative law, “custom and usage” allows employees to rely on standard internal practices, even when those practices deviate from formal policy. If it was common for supervisors to approve overtime verbally or to validate slips days or weeks later retroactively, that context must inform any analysis of employee conduct. Without such context, the inquiry becomes not only incomplete but also legally unsound.

Crucially, attempts to criminalize standard payroll practices retroactively may expose the employer to civil rights liability, especially where selective enforcement can be shown. Suppose only whistleblowers, women, or Black employees are targeted for recordkeeping violations under widely tolerated practices. In that case, courts may infer discriminatory or retaliatory intent under Title VII, the New York State and City Human Rights Laws, and Section 1983 of the Civil Rights Act.

In sum, employees who act under managerial instruction or accepted custom cannot lawfully be cast as fraudsters when the employer who directed those practices decides to rewrite the rules, often for retaliatory or political reasons. Compliance is not complicity. Obedience is not dishonesty. Reconstructed time records, submitted in good faith under broken systems, are not criminal acts—they are evidence of systemic failure and legal entitlement.

VI. Conclusion: Truth, Retaliation, and the Law’s Role in Restoring Balance

At its core, this article exposes the dangerous conflation of administrative irregularity with intentional fraud—a distortion increasingly deployed by public employers to silence whistleblowers, discredit employees, and insulate managerial failures from scrutiny. The mischaracterization of reconstructed payroll records as “deception” reflects not legal analysis, but institutional panic. It is a narrative built not on law or evidence but retaliation and reputational control.

The statutory and judicial landscape is clear: under the FLSA and New York Labor Law, the employer bears the burden of maintaining complete and accurate payroll records. When they fail to do so—as countless public employers have, particularly those still reliant on hybrid paper systems or verbal approval chains—they cannot shift the evidentiary burden to the employee. They cannot cry “fraud” when they truly fear exposure.

In a legal system committed to fairness, employees must not be punished for following instructions, working within defective systems, or relying on the very managerial practices they were trained to use. Whether submitting a backdated slip, logging hours on an outdated form, or estimating time due to supervisor-approved exceptions, such actions are not fraud—they are lawful attempts to account for work already performed.

When investigators—internal or external—fail to account for employer recordkeeping duties, longstanding practices, or trauma-related reporting behavior (especially in retaliation or harassment cases), they risk becoming tools of institutional abuse. They mistake poor systems for deceit. They mistake trauma symptoms for dishonesty. And they mistake systemic accountability for individual blame.

This legal ignorance—or strategic misdirection—has material consequences. It leads to lost wages, unjust discipline, ruined careers, and re-traumatized survivors. But it also exposes public employers to significant liability for retaliation, selective enforcement, and procedural violations under labor and civil rights statutes.

Let us be clear: recreating records is not fraud. It is often the only remedy left when employers fail to do their jobs. Punishing employees for this, especially under systems plagued by managerial dysfunction, discriminatory norms, or retaliatory motives, is not only legally impermissible but also a perversion of justice.

The law has evolved to recognize these truths. Now investigators, employers, and courts must catch up.