Corps Cheat Workers out of Pay
- News & Views for Anarchists & Activists:
Shaving time off payrolls widespread practice
Falsifying workers' hours held to be common management trick
to pare down expenses
By Steven Greenhouse
New York Times
Sunday, April 04, 2004 -- As a former member of the Air
Force military police, as a play-by-the-rules guy, Drew
Pooters said he was stunned by what he found his manager
doing in the Toys "R" Us store in Albuquerque, N.M.
Inside a cramped office, he said, his manager was sitting at
a computer and altering workers' time records -- secretly
deleting hours to cut their paychecks and fatten his store's
"I told him, 'That's not exactly legal,'" said Pooters, who
ran the store's electronics department. "Then he out and out
threatened me not to talk about what I saw."
Pooters quit, landing a job in 2002 managing a Family Dollar
store, one of 5,100 in that discount chain. Top managers
there ordered him not to let employees' total hours exceed a
certain amount each week, and one day, he said, his district
manager told him to use a trick to cut payroll: delete some
employee hours electronically.
"I told her, 'I'm not going to get involved in this,'"
Pooters recalled, saying that when he refused, the district
manager erased the hours herself.
Experts on compensation say that the illegal doctoring of
hourly employees' time records is far more prevalent than
most Americans believe. The practice, commonly called
shaving time, is easily done and hard to detect -- a simple
matter of computer keystrokes -- and has spurred a growing
number of lawsuits and settlements against a wide range of
Workers have sued Family Dollar and Pep Boys, the auto parts
and repair chain, accusing managers of deleting hours. A
jury found that Taco Bell managers in Oregon had routinely
erased workers' time. More than a dozen former Wal-Mart
employees said in interviews and depositions that managers
had altered time records to shortchange employees. The
Department of Labor recently reached two back-pay
settlements with Kinko's, totaling $56,600, after finding
that managers in Ithaca, N.Y., and Hyannis, Mass., had
erased time for 13 employees.
"There are a lot of incentives for store managers to cut
costs in illegal ways," said David Lewin, a professor of
management who teaches a course on compensation at the
University of California, Los Angeles. "You hope that would
be contrary to company practices, but sometimes these
practices become so ingrained that they become the dominant
Officials at Toys "R" Us, Family Dollar, Pep Boys, Wal-Mart
and Taco Bell say they prohibit manipulation of time
records, but many acknowledge that it sometimes happens.
"Our policy is to pay hourly associates for every minute
they work," said Mona Williams, vice president for
communications at Wal-Mart. "With a company this large,
there will inevitably be instances of managers doing the
wrong thing. Our policy is if a manager deliberately deletes
time, they're dismissed."
Compensation experts say that many managers, whether at
discount stores or fast-food restaurants, fear losing their
jobs if they fail to keep costs down.
"A lot of this is that district managers might fire you as
soon as look at you," said William Rutzick, a lawyer who
reached a $1.5 million settlement with Taco Bell last year
after a jury found the chain's managers guilty of erasing
time and requiring off-the-clock work. "The store managers
have a toehold in the lower middle class. They're being paid
$20,000, $30,000. They're in management. They get medical.
They have no job security at all, and they want to keep
their toehold in the lower middle class, and they'll often
do whatever is necessary to do it."
Another reason managers shave time, experts say, is that an
increasing part of their compensation comes in bonuses based
on minimizing costs or maximizing profits.
"The pressures are just unbelievable to control costs and
improve productivity," said George Milkovich, a longtime
Cornell University professor of industrial relations and
co-author of the leading textbook on compensation.
Beth Terrell, a Seattle lawyer who has sued Wal-Mart,
accusing its managers of doctoring time records, said: "Many
of these employees are making $8 an hour. These employees
can scarcely afford to have time deleted. They're barely
paying their bills already."
In the punch-card era, managers would have had to conspire
with payroll clerks or accountants to manipulate records.
But now it is far easier for individual managers to
accomplish this secretly with computers, payroll experts say.
Pooters, a father of five who left the Air Force in 1997 for
a career in retailing, talks with disgust about photocopied
Toys "R" Us records that he said showed how his manager made
it appear that he had clocked out much earlier than he had.
"Unless you keep track of your time and keep records of when
you punch in and punch out, there's no way to stop this," he
After leaving Toys "R" Us and Family Dollar, Pooters moved
to Indiana and took a job as an account manager with
Rentway, a chain that leases furniture and electronics.
There, he and a co-worker, William Coombs, said, the
workload was so intense that they typically missed four
lunch breaks a week. Nonetheless, they said, their manager
inserted a half-hour for lunch into their time records every
day, reducing their pay accordingly.
"They told us to sign the payroll printouts to confirm it
was right," Pooters said, describing a confrontation last
November. "When we protested about what happened with our
lunch hours, the manager said, 'If you don't sign, you're
not going to get paid.'"
Coombs said: "They removed our lunch hours all the time. We
were told if we didn't sign the payroll sheets, we'd be
Larry Gorski, Rentway's vice president for human resources,
said his company strictly prohibited erasing time. "As soon
as we hear this is going on, we jump all over it," he said.
Shannon Priller, who worked at a Family Dollar store in Rio
Rancho, N.M., sheepishly acknowledged that she sometimes
watched her district manager erase her hours. "The manager
and I would sit there and go over everybody's time cards,"
she said. "We were told not to go over payroll, or we would
lose our jobs. If we were over, my hours would get shaved."
Some weeks, she said, she lost 10 or 15 hours, and her 6
a.m. clock-in time became 9 a.m. Patricia Bauer, a clerk at
the store, said her paycheck was sometimes cut to under 30
hours on weeks when she worked 40.
Like Pooters, these women have joined a lawsuit that accuses
Family Dollar of erasing time and requiring off-the-clock work.
Kim Danner said that when she ran a Family Dollar store with
eight employees in Minneapolis, her district manager urged
her to erase hours so that she never paid overtime or
exceeded her allotted payroll. Federal law generally
requires paying time-and-a-half to nonmanagerial employees
who work more than 40 hours a week.
Danner said her employees could not do all the unloading,
stocking, cashier work and pricing of merchandise in the
hours allotted. "The message from the district manager was,
basically, 'I don't care how you do it, just get it done,'"
So she altered clock-out times and inserted half-hour lunch
breaks even when employees had worked through them. "I felt
horrible that I was doing this," she said. "I felt
pressured, absolutely. If I refused, I would have been
After five months, she quit.
Sandra Wilkenloh, Family Dollar's communications director,
declined to respond to the lawsuit, but said, "Family
Dollar's policy is to fully comply with all wage and hour
laws and to take appropriate disciplinary action in any case
where we determine that such policy has been violated."
She said Family Dollar maintained a hot line that employees
could call anonymously to report wage violations.
Rosann Wilks, who was an assistant manager at a Pep Boys in
Nashville, said she was fired in 2001 after refusing to
delete time. She said her district manager told her, "Under
no circumstances at all is overtime allowed, and if so, then
you need to shave time."
At first, she bowed to orders and erased hours. Some
employees began asking questions, she said, but they refused
to confront management. "They took it lying down," she said.
"They didn't want to lose their job. Jobs are hard to find."
When she started feeling guilty and confronted her district
manager, she said: "It all came to a boil. He fired me."
Bill Furtkevic, Pep Boys' spokesman, said his company did
not tolerate deleting time.
"Pep Boys' policy dictates, and record demonstrates, that
any store manager found to have shaved any amount of
employee time be terminated," he said. He added that the
company's investigation "revealed no more than 21 instances
over the past five years where time shaving" had occurred.
More than a dozen former Wal-Mart employees said time
records were altered in numerous ways. Some said that when
they clocked more than 40 hours a week, managers transferred
extra hours to the following week, to avoid paying overtime.
Federal law bars moving hours from one week to another.
Wal-Mart executives acknowledged that one common practice,
the "one-minute clock-out," had cheated employees for years.
It involved workers who clocked out for lunch and forgot to
clock back in before finishing the day. In such situations,
many managers altered records to show such workers clocking
out for the day one minute after their lunch breaks began --
at 12:01 p.m., for example. That way a worker's day was
often three hours and one minute, instead of seven hours.
Williams, the Wal-Mart spokeswoman, said Wal-Mart had
broadcast a video to store managers last April telling them
to halt all one-minute clock-outs. Under the new policy,
when workers fail to clock in after lunch, managers must do
their best to determine what their true workday was.
In interviews, five former Wal-Mart managers acknowledged
erasing time to cut costs. Victor Mitchell said that as an
assistant manager in Hazlehurst, Miss., in 1997, he
frequently shaved time.
"We were told we can't have any overtime," he said. "It's
what the other assistant managers were doing, and I went
along with it."
Mitchell said the store's manager ordered them to stop. But
he said that in 2002, after becoming manager of a Wal-Mart
in Bogalusa, La., a new district manager ordered him to
erase overtime. He said he refused.
Williams said Wal-Mart had increased efforts to stop
managers from shaving time or allowing off-the-clock work.
Wal-Mart has circulated a "payroll integrity" memo, saying
that any worker, "hourly or salaried, who knowingly
falsifies payroll records is subject to disciplinary action
up to and including termination."
Employees at Wal-Mart and other companies complain that they
receive no paper time records, making it hard to challenge
management when their paychecks are inexplicably low.
Danner, the former Family Dollar manager, praised the system
at the McDonald's restaurant she managed for seven years. At
day's end, she said, employees received a printout detailing
total hours worked and when they clocked in and out.
"We never had any problems like this at McDonald's," she said.
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