What conduct can trigger penalties under California's False Claims Act?

Penalties can be triggered when a person or company knowingly submits a false or fraudulent claim for payment to a state or local government, knowingly uses false records or statements to obtain government funds, knowingly avoids an obligation to repay the government, or conspires to perform any of these acts. Examples include overbilling Medi-Cal, falsifying public contract payroll records, or inflating costs on state grants.

What civil penalties can employers face for violating the California False Claims Act?

Civil penalties can include per-claim fines (routinely adjusted for inflation), treble (three-times) damages equal to the government’s actual losses, and reimbursement of the government’s legal and investigative costs. The law can therefore produce financial liability far exceeding the original fraudulent amount.

Can an employer lose the ability to bid on public contracts or keep professional licenses?

Yes. In addition to monetary penalties, violators can face permanent disqualification from public contracting, loss of professional licenses or certifications, and in some cases criminal prosecution if the conduct also violates state criminal statutes.

Are whistleblowers protected from retaliation in California?

Yes. California law protects employees who report suspected false claims from retaliation—such as firing, demotion, harassment, or blacklisting. Remedies for unlawful retaliation can include reinstatement, double back pay with interest, damages for emotional harm, and attorney fees.

What financial reward can a whistleblower receive for a successful qui tam case?

If a whistleblower’s information leads to a government recovery, they may receive a share of the recovered funds. Typical award ranges are roughly 15%–33% if the government intervenes and up to about 25%–50% if the government does not intervene. Exact percentages depend on factors such as the whistleblower’s contribution and the government’s level of involvement.

How does the qui tam filing process work in California?

A qui tam case is filed by a private relator (whistleblower) under seal in state court. The filing remains confidential while the California Attorney General reviews the allegations and decides whether to intervene. If the state intervenes, it typically leads the litigation; if not, the relator may proceed with the suit. Cooperation with investigators and, if necessary, trial testimony are usually required.

Can I file anonymously or informally report suspected fraud?

Informal or anonymous tips to government investigators are possible, but to preserve the legal protections and potential reward under the False Claims Act you generally must file a qui tam lawsuit (filed under seal) and work with counsel. Filing properly is important to secure confidentiality, legal protection, and a potential reward.

Will I have to pay upfront to pursue a False Claims Act case?

Most whistleblower plaintiffs use attorneys who handle qui tam cases on a contingency or fee-sharing basis (fees come from the recovery). Costs and fee arrangements vary by firm, so discuss payment terms during your initial consultation.

What should I do if I suspect my employer is submitting false claims?

Preserve relevant documents and communications, avoid disclosing your investigation to coworkers or supervisors who may retaliate, and consult an experienced qui tam/False Claims Act attorney before making formal disclosures. An attorney will evaluate the strength of your information, advise on confidentiality, and guide you through the sealed-filing process if a qui tam suit is appropriate.

How long does it take for the state to decide whether to intervene?

Timing varies by case complexity and the resources of the Attorney General’s office; the initial sealed review period can take many months. Your counsel will coordinate with investigators and keep you informed as the process unfolds.

False Claim Act Penalties in California

Aug 25, 2025 | By Julian Burns King | Read Time: 4 minutes | False Claims Act

Let’s be honest: Some employers cut corners. However, lying to the government for financial gain crosses a line. That’s not just bad business—it’s fraud, and under California law, it carries serious consequences.

So, what are the actual False Claims Act penalties in California? In short: steep financial fines, repayment of stolen funds, and long-term reputational damage. Employers caught submitting false claims to the state, whether for COVID relief, healthcare reimbursement, or public contracts, face a legal reckoning. And if you’re an employee thinking about reporting it, California gives you tools to do so safely, and sometimes even rewards you for stepping forward.

At King & Siegel LLP, we help whistleblowers understand their rights under the California False Claims Act. Our attorneys exclusively represent workers, not corporations. Whether you’re still employed or already facing retaliation, we’ll walk you through your options, work to protect you from blowback, and help you pursue what’s fair. Your consultation is free, and our advice is clear.

What Triggers False Claim Act Penalties?

An employer doesn’t need a grand scheme or a pile of shredded documents to trigger liability under California’s False Claims Act. All it takes is:

Knowingly submitting a false or fraudulent claim to a state or local government agency for payment or approval,
Knowingly using a false record or statement to get government funds,
Knowingly avoiding an obligation to pay money back to the government, or
Conspiring to do any of the above.

Common scenarios include:

Overbilling Medi-Cal for services never performed,
Falsifying wage records for public construction projects,
Inflating costs on state-funded research grants or COVID relief applications, and
Delivering substandard goods or services to California government entities while certifying compliance.

These aren’t abstract offenses. They waste taxpayer money and punish honest businesses. That’s why the law doesn’t just slap wrists; it imposes severe False Claim Act penalties to deter future misconduct.

What Are the Civil Penalties for a False Claim?

Under California’s law, employers who violate the False Claims Act may suffer:

Civil penalties of $5,500 to $11,000 for each false claim submitted (adjusted regularly for inflation);
Treble damages, which are three times the amount of actual damages sustained by the government; and
Legal fees and investigation costs owed to the state or the whistleblower’s counsel.

So if a contractor fraudulently overbills the state by $250,000, they may end up owing more than $750,000 plus penalties.

California’s Additional Penalty Provisions

In some cases, California law layers on additional consequences. These may include:

Permanent disqualification from bidding on public contracts;
Loss of licenses or certifications, especially for healthcare providers and contractors; and
Criminal prosecution, if the fraudulent conduct crosses into theft or grand theft under CA law.

While the California False Claims Act imposes civil, not criminal, sanctions, many acts that trigger False Claim Act penalties also violate California criminal statutes or federal law, opening the door to prosecution.

Are Whistleblowers Protected from Retaliation?

Yes. And those protections are strong. Under California law, workers who report False Claims Act violations, whether internally, to a lawyer, or the government, are protected from:

Firing or demotion;
Harassment or workplace retaliation; and
Blacklisting, denial of promotions, or reduction in pay or hours.

If retaliation does occur, you may be entitled to:

Reinstatement to your former position,
Double back pay with interest,
Compensation for emotional distress and harm to your career, and
Legal fees and costs.

These protections apply regardless of whether the government intervenes in your case. California courts take them seriously, and so do we.

What About Whistleblower Rewards?

If your tip leads to a successful recovery, you may be entitled to a whistleblower reward of 15% to 33% of the recovered funds if the government intervenes, and up to 25% to 50% if it doesn’t. That means if the state recovers $3 million based on your information, you might receive between $450,000 and $1.5 million.

However, the process isn’t automatic. You’ll need to:

File a confidential qui tam lawsuit under seal;
Work with counsel to present credible, non-public information; and
Cooperate with investigators and possibly testify if the case goes to trial.

At King & Siegel, we guide whistleblowers through every step while fighting to protect their job, identities, and rights.

How Does the Process Work?

Bringing a claim under the False Claims Act isn’t like reporting a bad manager to HR. It’s a legal process that requires a strategic approach. Here’s how it usually unfolds:

You consult an attorney, who investigates the facts and determines if a False Claims Act violation occurred;
Your attorney files a qui tam lawsuit under seal (kept secret from your employer) in state court;
The California Attorney General’s office reviews the claim and decides whether to intervene;
If the state joins, it takes the lead, but if not, you and your legal team can still pursue the case; and
If successful, you may recover a percentage of the funds, and your employer may face full False Claim Act penalties.

You only get one shot at filing, so it’s essential to do it right the first time.

Why Do Workers Choose King & Siegel LLP?

At King & Siegel, we don’t represent corporations. We represent individuals, including employees, professionals, healthcare workers, and government contractors, who saw something wrong and chose to speak out. Here are a few of the reasons people pick us:

Our employment attorneys trained at Harvard, Columbia, NYU, and the nation’s top litigation firms;
We’ve recovered tens of millions of dollars for clients in just a few years;
We speak Spanish, so our staff can support diverse communities across California;
We are strategic, proactive litigators, known for reducing stress while achieving powerful results; and
We offer free, 30-minute consultations to help you understand your rights, without pressure.

Whether you’ve already reported fraud or you’re weighing your options, we’re ready to help.

Contact King & Siegel LLP Today

False Claims Act penalties are designed not only to punish fraud but also to empower truth-tellers. If your employer is misusing taxpayer funds, you don’t have to carry that weight alone. Call us today to schedule your free consultation. We’ll help you protect your job, assert your rights, and decide whether to take the next step on your terms.

Julian Burns King

Julian Burns King graduated with honors from Harvard Law School and founded King & Siegel in 2018. As head of the Firm’s discrimination and harassment practice areas, she champions the rights of working parents and victims of workplace discrimination and harassment. She has been recognized as a “Rising Star” by Super Lawyers annually since 2018 and has recovered tens of millions of dollars on behalf of her clients.