Are you morally or should you legally be required to report illegal activity?

Templeton

I'm thinking the answer from most everyone is "depends" on the activity so I'm interested in your examples (real or imagined) and here's the one that got me thinking about this:

My mother in law was complaining about her job, how her boss is telling them to "correct" thier timesheets to reduce the hours worked (so the company doesnt have to pay overtime), which is illegal. You can't ask employees to do that, and if you know or suspect they have done that you are required to change it to actual hours worked. I'm wondering does my MIL have a moral responsibility to report this (given that it affects others too who might not know thier rights)? If she doesn't, do I have a moral responsibility to report it? Would it be wrong for me to report it?