http://www.nytimes.com/2004/04/04/national/04WAGE.html
April
4, 2004
[photo] [photo]
At
left, Drew Pooters, pictured with his wife, Anna,
said managers at Toys "R" Us and Family Dollar deleted hours from
employees' records to avoid paying overtime. The companies say their policies
forbid that. Rosann Wilks
said she was fired as assistant manager at a Pep Boys in Nashville after
refusing instructions to delete hours from work records.
Altering of Worker Time
Cards Spurs Growing Number of Suits
By
Steven Greenhouse
Correction
Appended
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.
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 bottom line.
"I
told him, `That's not exactly legal,' " said Mr. Pooters, who ran the store's electronics department.
"Then he out-and-out threatened me not to talk about what I saw."
Mr.
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,' " Mr. 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 businesses.
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 photocopy centers, 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 practice."
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. "All this manipulation of payroll may be
the unintended consequence of increasing the emphasis on bonuses."
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.
Mr.
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 said.
After
leaving Toys "R" Us and Family Dollar, Mr. 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," Mr. 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.' "
Mr.
Coombs said: "They removed our lunch hours all the time. We were told if
we didn't sign the payroll sheets, we'd be terminated."
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
Mr. Pooters, these women have joined a lawsuit that
accuses Family Dollar of erasing time and requiring off-the-clock work.
"It needs to stop," said Ms. Priller, who
now cleans houses.
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.
Ms.
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,' " she said.
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
terminated easily."
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.
Ms.
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."
Mr.
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.
Ms.
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.
Ms.
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.
Correction:
April 7, 2004
A
front-page article on Sunday about doctoring of payroll time records misstated
Wal-Mart's response to claims by some former employees that managers had
sometimes altered the records of workers who forgot to clock back in after
lunch, to make it appear that their workday ended at lunchtime. Although
Wal-Mart acknowledged the practice, called the "one-minute
clock-out," it said the intent was to draw the workers' attention to
problems with their time records, not to cheat employees.
Copyright
2004 The New York Times Company
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