Are Whistleblower Laws Federal or State?
In the US, whistleblower laws exist at both the federal and state levels. The False Claims Act and the Whistleblower Protection Act of 1989 are examples of federal laws that provide protections and incentives for individuals who blow the whistle on certain types of misconduct and wrongdoings.
The federal False Claims Act, for instance, encourages whistleblowers to come forward and report fraud committed against the government, offering them the opportunity to receive whistleblower rewards.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, another federal law, created the Securities and Exchange Commission’s Whistleblower Program. Through this Program, the Act provides for monetary awards and protection against retaliation for whistleblowers who report violations of federal securities laws.
Similarly, the Dodd-Frank Act also created a Whistleblower Program operated by the Commodities and Futures Trading Commission. That Program also provides for awards and protection from retaliation for whistleblowers who report violations of federal commodities laws.
State-level whistleblower laws are specific to each state they belong to and can address a wide range of issues and provide additional protection for whistleblowers. Some examples of state-level whistleblower laws include the California False Claims Act and the New York False Claims Act. Many of these laws are modeled after the federal False Claims Act.
Depending on the fraud, the government entity impacted, and the circumstances of each potential case, whistleblowers may have claims under a federal whistleblower law, a state whistleblower law, or both.
What Are Some Key Differences Between Federal and State Whistleblower Laws?
Federal and state whistleblower laws often share the common goal of rewarding and protecting individuals who report wrongdoing, but there are also notable differences between the two.
The Protections Provided
Many federal and state laws prohibit retaliation against whistleblowers. However, federal laws often offer a broader range of protections and remedies, including potential reinstatement, back pay, and compensatory damages. State laws may provide similar protections but can vary in the available remedies and complaint processes.
Federal laws, such as the False Claims Act and the Dodd-Frank Act, provide financial incentives, including potential monetary rewards, to whistleblowers in certain cases. Some state laws, like the false claims acts that many states have enacted, also include provisions for monetary rewards. However, some state and federal laws that are focused more on protecting whistleblowers from retaliation, such as the Whistleblower Protection Act of 1989 which protects federal employees who report wrongdoing from retaliation, do not include such awards for reporting fraud.
Claims brought under federal whistleblower laws, like the False Claims Act, are typically brought in federal court.
For other whistleblower programs, like the SEC and CFTC Whistleblower Programs, as well as the IRS Whistleblower Program, whistleblowers do not file a court case. Instead, the whistleblower submits a tip to the agency that operates the program. Whistleblower tips made to these programs and others run by government agencies may result in those respective agencies filing cases in federal court that are based on the tip submitted by the whistleblower.
Whistleblowers bringing claims under state laws must file these claims in state court if their only claim falls under a state law. However, whistleblowers often have cases that include both claims under federal law and state law. In those cases, most often the case will be filed in federal court, with the state law claims brought alongside the federal claims due to what is known as “supplemental jurisdiction.”
Understanding State Whistleblower Laws
In order for whistleblowers to receive a reward for their contributions to the recovery of state funds, most states that have whistleblower laws require the whistleblower to bring a qui tam lawsuit against the company or individual cheating the state.
Some state false claims laws apply only to fraud involving Medicaid or other state healthcare funds. In other states, the false claims law applies to a broader range of state—and sometimes local government—programs.
States with false claims laws that apply only to fraud involving Medicaid or other state healthcare funds: Arkansas, Colorado, Connecticut, Louisiana, Michigan, Missouri, New Hampshire, Oklahoma, Texas, and Washington.
States with laws that apply to fraud involving a broad range of state-funded programs, including Medicaid: California, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Maryland, Massachusetts, Minnesota, Montana, Nevada, New Jersey, New Mexico, New York, North Carolina, Rhode Island, Tennessee, Virginia, and the District of Columbia.
There are also two state laws—the California Insurance Claims Fraud Prevention Act and the Illinois Insurance Claims Fraud Prevention Act—that help whistleblowers fight fraud against private insurers with the potential to receive financial rewards for their assistance.
Some states and the District of Columbia also permit whistleblowers to report violations of tax fraud and share in the states’ recoveries. Illinois, Indiana, and Rhode Island permit whistleblowers to file qui tam suits related to violations of tax law other than income tax law. The District of Columbia permits whistleblowers to file qui tam suits related to violations of tax law including income tax law. Maryland permits whistleblowers to report tax fraud and share in the state’s recoveries under a separate whistleblower program modeled after the IRS’s whistleblower program.
What states have whistleblower laws?
Here are links to the false claims whistleblower laws enacted by states and the District of Columbia:
In at least two states, Arkansas and Missouri, a whistleblower may receive a reward for providing information that leads to the recovery of state funds although these states do not allow whistleblowers to file qui tam lawsuits.
We do not list the false claims acts of states that have neither a qui tam provision nor a whistleblower reward. These include Kansas (Kan. Stat. Ann. § 75-7501 through § 75-7511, general application), Mississippi (Miss. Code Ann. § 43-13-201 through § 43-13-233, Medicaid only), Nebraska (Neb. Rev. Stat. § 68-934 through § 68-947, Medicaid only), Oregon (Or. Rev. Stat. § 180.750 through § 180.785, general application) and Utah (Utah Code § 26-20-1 through § 26-20-15, healthcare only).
We attempt to keep the information on our site as current as possible, but you should check for recent amendments to the laws before relying on this information.