Altering of Worker Time Cards Spurs Growing Number of Suits

[Yoshie Furuhashi <furuhashi.1@xxxxxxx>]

*****   The New York Times, April 4, 2004
Altering of Worker Time Cards Spurs Growing Number of Suits
By STEVEN GREENHOUSE

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.

<http://www.nytimes.com/2004/04/04/national/04WAGE.html>   *****
--
Yoshie

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