Consulting Work - Question About Legality

I have a quick question for you. I don't know if I'll get the right answer on a style forum, but I know that some of you are lawyers, etc., so here it goes: I work as a consultant in the renewable energy field (I'm an electrical engineer FYI). Recently, due to some complicated circumstances, work has been slowing down and for the first time in two years I have not been 100% (or greater than 100%) billable. I have asked for an overhead # to charge my non-billable hours, but was told that there is no such overhead # and that I should "spread my hours around to the various projects that we have on file, even though I have not performed any work for some of said projects." These hours will eventually be charged to, and paid for by the various clients. My question is, "Is this practice illegal, unethical, or neither?" P.S. I can't edit the poll, and I know that I misspelled "advice" Thanks for the help. 1/30/2010 - Update in post #11

Thanks for all of the responses. I want to give a little background information. When I was told to do this, I flat out said "NO". I said that it was unethical and that it may also be illegal. The reason I'm asking here is because I talked to another engineer friend of mine who told me that it's unethical only and not illegal. He says that he's been asked to do this at just about every firm that he's ever worked for. I won't say the name of the company that I work for, but we are one of the largest consulting engineering and EPC firms in the world, with over 10,000 employees and officies in over 67 countries. We are a very well respected company that is consistently ranked in the top five firms in the world in our core business areas. Company policy is not to "spread hours" around when light. I have friends that work in other divisions that consistently charge their down time to an overhead number. The way the process is supposed to work in our company is if you have non-billable hours, you charge them to your division's overhead number. In other words, the company itself is not shady. My supervisor told me that our division, because it is so small (~30 employees), doesn't have an overhead #. I don't know if my supervisor is "going rogue" and trying to make himself look good by increasing our percent billable, or if he honestly doesn't have an overhead # for me to charge to. Harvey - I like your idea. I'm going to get a formal response in writing. I'll let you guys know what I get. I'll decide what to do when I get my response.