Cutting time cards to fatten profits

[Louis Proyect <lnp3@xxxxxxxxx>]

NY 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."

full: http://www.nytimes.com/2004/04/04/national/04WAGE.html


Louis Proyect
Marxism list: www.marxmail.org