(Rule 14a-101)
                            SCHEDULE 14A INFORMATION
                Proxy Statement Pursuant to Section 14(a) of the
                         Securities Exchange Act of 1934

Filed by the Registrant  [X]
Filed by a Party other than the Registrant  [   ]

Check the appropriate box:
[   ]  Preliminary Proxy Statement        [   ]  Confidential, for Use of the
                                                 Commission Only (as permitted
                                                 by rule 14a-6(e)(2))

[   ]  Definitive Proxy Statement
[   ]  Definitive Additional Materials
[X  ]  Soliciting Material Pursuant to Rule 14a-12

                           SANDATA TECHNOLOGIES, INC.

                (Name of Registrant as Specified in Its Charter)

    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

  [ ]  No fee required.

  [X] Fee computed on table below per Exchange Act Rules 14a-6 (i) (1) and 0-11.

      (1)  Title of each class of securities to which transaction applies:
           Sandata Technologies, Inc. Common Stock, par value $.001 per share

      (2)  Aggregate number of securities to which transaction applies:
           2,481,806 shares of Sandata Technologies, Inc. Common Stock, par
           value $.001 per share

      (3) Per  unit  price  or other  underlying  value of  transaction
          computed  pursuant to Exchange  Act Rule 0-11 (set forth the amount on
          which the filing fee is calculated  and state how it was  determined):
          The filing fee was determined based upon the sum of (a) the product of
          665,208 shares of common stock and the merger  consideration  of $1.91
          per share and (b) the product of options to purchase  20,000 shares of
          common  stock and $.91  (which is the  difference  between  the merger
          consideration  of $1.91  per share of  common  stock and the  exercise
          price of $1.00 per share of common stock of each of the 20,000  shares
          covered by the  outstanding  options).  In  accordance  with Rule 0-11
          under the Securities Exchange Act of 1934, as amended,  the filing fee
          represents one-50th of one percent of the total transaction fee.


     (4)  Proposed maximum aggregate value of transaction: $1,288,747


     (5)  Total fee paid: $258


  [  ]  Fee paid previously with preliminary materials.


     [X] Check box if any part of the fee is offset as provided by Exchange  Act
Rule 0-11 (a) (2) and identify the filing for which the  offsetting fee was paid
previously.  Identify the previous filing by registration  statement  number, or
the form or schedule and the date of its filing.

(1)      Amount previously paid: $258


(2)      Form, Schedule or Registration Statement No.: Schedule 14A


(3)      Filing Party: Sandata Technologies, Inc.


(4)      Date Filed:  November 15, 2002


Sandata  Technologies Enters into Nonbinding Agreement
with Stockholders to Settle Lawsuit for $2.21 per share

     Port Washington, NY, January 3, 2003 - Sandata Technologies,  Inc. (NASDAQ:
SAND)  announced  today  that  it  has  executed  a  nonbinding   Memorandum  of
Understanding  among  Sandata,  the  members of its Board of  Directors  and the
plaintiffs  in two purported  class action  lawsuits  styled  Seitler v. Sandata
Technologies,  Inc.,  et al.  Civil Action No.  19886-NC,  and Yetzer v. Sandata
Technologies,  Inc., et al. Civil Action No. 19903-NC. The lawsuits,  which were
consolidated  pursuant to an Order of Consolidation  entered on October 22, 2002
by the Court of Chancery of the State of  Delaware,  allege that the  defendants
breached  their  fiduciary  duties to  Sandata  and its public  stockholders  in
connection with Sandata  Acquisition  Corp.'s August 5, 2002 proposal to acquire
all of the outstanding public shares of Sandata.  The consolidated  actions also
allege,  among other things, that the directors serving on the Special Committee
of the  Board  of  Directors  of  Sandata  are  not  independent  and  that  the
consideration  to be received  under  Sandata  Acquisition  Corp.'s  proposal is

     Pursuant to the Memorandum,  Sandata  Acquisition  Corp. agreed to increase
its offer set forth in the Merger  Agreement,  dated as of October 28, 2002,  by
and among Sandata Acquisition Corp., Bert E. Brodsky,  Hugh Freund, Gary Stoller
and Sandata,  to $2.21 for each  outstanding  share of Sandata common stock. The
Memorandum  also  provides  for the  parties to the  lawsuits  to use their best
efforts to agree upon, execute, and present to the Court a formal Stipulation of
Settlement  in order to obtain the approval of the Court of the  settlement  and
release of the consolidated  actions. The parties agreed that the Stipulation of
Settlement will provide,  among other things, (i) that Sandata Acquisition Corp.
will increase its offer contained in the merger  agreement to $2.21 per share of
Sandata  common  stock and (ii) for a complete  release  and  settlement  of all
claims against Sandata,  the members of its Board, Sandata Acquisition Corp. and
their respective predecessors,  successors,  assignees,  parents,  subsidiaries,
counsel,  accountants,   attorneys,   affiliates,  agents  and  representatives,
including  without  limitation,  investment banks or bankers or commercial banks
and any past, present, or future officers, directors, or employees of defendants
and their predecessors,  successors, assignees, parents, subsidiaries,  counsel,
accountants, attorneys, affiliates, agents and representatives, which have been,
or could have been,  asserted relating to Sandata  Acquisition Corp.'s proposal.
The Memorandum  further  provides that the parties to the  consolidated  actions
will petition the Court for final  certification  of a non-opt out class defined
as all  holders  of  Sandata  common  stock as of August 5,  2002,  through  and
including the closing date of the Merger Agreement.  The settlement contemplated
by the  Memorandum  is  subject to the  execution  of a formal  Stipulation  and
Settlement,  the consummation of the merger transaction with Sandata Acquisition
Corp. for $2.21 per share of Sandata  common stock,  final approval of the Court
of the settlement,  including certification of a class, and the dismissal of the
consolidated actions by the Court. The Memorandum also provides that, subject to
approval of the Court, Sandata will pay plaintiffs'  attorneys fees and expenses
in an amount not to exceed $60,000.


     Stockholders  of the  Company  will be able to  obtain a copy of the  proxy
statement and other relevant documents filed with the SEC  free-of-charge  (when
available) from the SEC's website at www.sec.gov.  The proxy statement will also
be available upon request by contacting the Company at our principal  office, 26
Harbor Park Drive, Port Washington, New York 11050, 516 484-4400.

     The Company is a leading provider of advanced  Information  Technology (IT)
solutions for payroll and billing,  electronic time and attendance  services and
IT support services.

     This press release contains forward-looking  statements which involve known
and unknown  risks and  uncertainties  or other  factors  that may cause  actual
results,  performance or achievements to be materially different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking  statements. When used herein, the words "may", "could", "will",
"believes",   "anticipates",   "expects"   and  similar   expressions   identify
forward-looking   statements  within  the  meaning  of  the  Private  Securities
Litigation Reform Act of 1995. For a discussion of such risks and uncertainties,
including but not limited to those  discussed  above in this press  release,  as
well as risks  relating to  developments  in and  regulation of the  health-care
industry,   new  technology   developments,   competitive  bidding,   risks  and
uncertainties  associated with the Internet and Internet-related  products,  and
other  factors,  readers  are urged to  carefully  review and  consider  various
disclosures made by the Company in its Annual Report on Form 10K-SB for the most
recently  completed  fiscal year and other  Securities  and Exchange  Commission